Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — ENVIRONMENT

Rating System

Mr. Chapman: asked the Secretary of State for the Environment if, as a means of implementing the policy of proper consultation on replacement of the existing rating system referred to in his answer of 4 February, Official Report, col. 271, he will publish a consultation paper on the possible alternatives.

Mr. Michael McNair-Wilson: asked the Secretary of State for the Environment if he will outline the possible alternatives to the present rating system currently under consideration by his Department.

The Secretary of State for the Environment (Mr. Michael Heseltine): As I told my hon. Friend the Member for Leek (Mr. Knox) on 4 February, we are currently examining all potential alternatives to the domestic rating system. I cannot yet say when the review will be complete, but I can assure my hon. Friend that there will be public consultation on the outcome, and I will certainly bear in mind the idea of issuing a consultation document on the possible alternatives.

Mr. Chapman: I am sure that my right hon. Friend recognises that the present rating system is unfair, illogical, undemocratic, inadequate and out of date and that almost any alternative is preferable to the present iniquitous impost. Will he bring forward a consultation paper, giving perhaps his initial comments on each of the various options to try to encourage a national debate so as to ascertain whether a consensus can be reached?

Mr. Heseltine: I am grateful to my hon. Friend for producing some of the arguments against the domestic rating system. I am sure that he will understand that there are others. I shall want to ensure that there is the widest consultation on the Government's conclusions. The difficulty that I face is that many of the adjectives that my hon. Friend has used to describe domestic rates apply with equal force to many of the alternatives.

Mr. McNair-Wilson: Does my right hon. Friend give credence to the concept of a local tax to be levied on all adults living within a county council or district council?

Mr. Heseltine: The recommendation of the Layfield committee was a local income tax, a concept to which I think the right hon. Member for Manchester, Ardwick

(Mr. Kaufman) has committed the Labour Party. That system has some attractions. The difficulty is to countenance all the work of my right hon. and learned Friend the Chancellor of the Exchequer in lowering national income tax levels being put at the mercy of overspending Labour authorities, which would increase them again.

Mr. R. C. Mitchell: Until the Government have considered their new proposals, will the Minister consider extending the rate rebate scheme to cover water rates? Much of the criticism is directed to high water rates, which bear heavily on poorer people.

Mr. Heseltine: I am interested that the hon. Gentleman has come to that conclusion, since the previous Government of his party presided over such wide increases in water rates and had every opportunity to apply systems of the sort that he suggests. The House will recognise that the initiative of my right hon. Friend and myself in lowering water rates from 19 per cent. to 13½ per cent. this year was a real demonstration of our concern.

Sir Brandon Rhys Williams: Is my right hon. Friend aware that more than 70 Conservative Members have already signed my early-day motion calling for the Government to produce a Green Paper on reform of local authority finance? Does he accept that something must be done urgently while the production of a Green Paper is in process? Will he consider the advantages of taking the entire cost of education, or at the very least teachers' salaries, off local authorities, as an immediate measure of relief?

Mr. Heseltine: I am well aware of the interest of my hon. Friend and of many other hon. Members in this subject. If we transfer a substantial part of local government expenditure to central Government expenditure, it will be necessary to raise finance centrally to pay for it. We return to the dilemma: do we lower levels of expenditure or raise additional taxes? That will be the subject of the wide consultation process that I think will be necessary.

Mr. Stoddart: Although it is universally thought that rates are a regressive tax, is the right hon. Gentleman aware that some of the alternatives might be a damned sight worse? Can he estimate the additional cost of a local income tax following the Layfield report, which estimated that the additional cost would be £100 million?

Mr. Heseltine: The figure would have to be part of the consultation process. It would be wrong to try to anticipate the options which the Government may want to put forward or to outline their conclusions in a piecemeal way. We should wait until the initial studies have been concluded.

Council House Sales

Mr. Knox: asked the Secretary of State for the Environment whether he will seek to amend the Housing Act 1980 to specify the maximum length of time which can elapse between an application being made by a tenant to purchase a council house and the sale of that council house being completed.

The Minister for Housing and Construction (Mr. John Stanley): This is a possibility that we considered, but we decided that it would not be in the tenants' best


interests, because of the likelihood that a specified maximum period would be treated by some authorities as the norm. We felt it preferable to rest ultimately on the Secretary of State's powers to intervene if he feels that tenants have or may have difficulty in exercising their right to buy effectively and expeditiously.

Mr. Knox: Is my hon. Friend aware that there is considerable concern about the length of time some councils are taking to effect those council house sales? Is he sure that his powers are being used with sufficient vigour?

Mr. Stanley: I assure my hon. Friend that we share his concern about the rate of progress of certain authorities. I am glad to repeat what I said last Saturday to those authorities which are delaying and spinning out the sale of council houses. I said that if they will not sell, we will and that we would start the process soon.

Mr. Heddle: Will my hon. Friend explain to the House and to the nation the position of tenants who wish to buy who have served their RTB 1 forms on their local authority, but have not received an acknowledgement since they served their notices? Will my hon. Friend explain how their position can be protected, bearing in mind that up to 3 April they can buy at the August 1980 valuation?

Mr. Stanley: I assure my hon. Friend that as long as a tenant has submitted a valid right-to-buy application form, and provided he submits it by 3 April, under the present legislation he will automatically qualify for an August 1980 valuation.

Mr. R. C. Mitchell: Is the Minister aware that tenants of some houses owned by the Department of the Environment have been refused permission to buy?

Mr. Stanley: As the hon. Member will be aware, various properties were excluded from the provisions of the right-to-buy legislation. Those properties are owned by Government Departments or county councils and the occupation of the properties is directly related to the job which a person is doing.

Inner London (Rates)

Mr. William Shelton: asked the Secretary of State for the Environment what is his Department's estimate of average rate increases in inner London for 1981–82 over 1980–81.

The Minister for Local Government and Environmental Services (Mr. Tom King): The average general rate increase in inner London will be 26·9 per cent. and the domestic 37·4 per cent.

Mr. Shelton: Does not my right hon. Frend agree that that is a heavy burden on the ratepayers of inner London? Does he not agree that it is principally due to two causes—first, over-spending by many Labour authorities in inner London, and, secondly, the lack of an adequate safety net to prohibit the move of too much Government grant from inner London in this transitional year?

Mr. King: I am surprised that my hon. Friend left out the most significant factor in the rate rises in inner London, although he may have included it in his reference to Labour authorities. That is the expenditure level of the Inner London Education Authority, which has contributed

enormously and disastrously to the level of rate increases. That could have serious consequences for London. He is right about the other authorities. If he checks the figures, he will find that—[Interruption.]

Mr. Speaker: Order. Is the hon. Member for Newham, North-West (Mr. Lewis) addressing me?

Mr. Arthur Lewis: I was talking to the Minister.

Mr. Speaker: I only want the House to know that I do not tolerate hon. Members coming up to the Chair when they have not been called.

Mr. Soley: Does the Minister not agree that, although there may be an argument in favour of local authority cuts, with which I do not agree, and although there is an argument for more spending, there is no argument for cuts combined with high rate increases? That is precisely what has happened in the Conservative-controlled authorities of Kensington and Chelsea, Wandsworth and even my own authority of Hammersmith and Fulham. They did not have the guts to put up the rates by sufficient amounts to avoid a supplementary rate later in the year.

Mr. King: The hon. Gentleman should address himself more honestly to the problems which face inner London. The London borough of Lambeth receives the highest grant of any authority in inner London. Therefore, the idea that the Government are somehow working against the local authorities in grant distribution is wrong. Despite that, the rate increases are massive.
I apologise to my hon. Friend the Member for Streatham (Mr. Shelton). Owing to the station break, I failed to answer the latter half of his question. He referred to the safety net and I understand his point. He will be aware that we discussed that during debates on the Local Government, Planning and Land Act and the rate order. London has done better in previous years. We thought it right to make a switch of distribution this year.

Mr. Mellor: Does my right hon. Friend agree that the London borough of Wandsworth is to be congratulated on seeking to preserve jobs in the borough by passing on to ratepayers only increases due to the ILEA and not increases due to its own over-spending? Does he agree that it is grossly against ratepayers' interests if councils continue to spend wildly during the present economic depression?

Mr. King: I confirm what my hon. Friend said about the London borough of Wandsworth, which has done remarkably well in the present situation. None of the rate increases being requested of ratepayers in Wandsworth is due to the borough itself, but to external demands—principally to demands being made by the ILEA.

Mr. Dubs: Has not the Minister forgotten to explain that one of the reasons for the difficulties facing the inner London boroughs is the effect of the Government's block grant system, which has taken away a large sum of money from inner London? Will he remind the House how much money has been taken away from inner London as a result of the Government's policy?

Mr. King: Our original projection was about £100 million, which was dependent upon sensible levels of expenditure being observed by authorities in London. The largest contributor to that figure being exceeded is


undoubtedly the Inner London Education Authority, which has cost inner London no less than £50 million of grant.

Council House Rents

Mr. Hardy: asked the Secretary of State for the Environment what he expects will be the average council house rent during the financial year 1981–82; and how this will compare with the position two years ago.

Mr. Stanley: The average council house rent for 1979–80 was £6·48 per dwelling per week. The figure for 1981–82 will depend on the decisions of local authorities within the framework of the new subsidy system.

Mr. Hardy: Is it not clear that next year will show that an enormous increase has been levied by the Government? Is that not astonishing as the Government have committed themselves to what they describe as a moral crusade against inflation? Will those increases not include unacknowledged increases in administrative costs as a result of the Government's inflationary policies?

Mr. Stanley: The hon. Gentleman must take into account the base from which rents are being increased. The previous Government ran away from their responsibilities on rents year after year. For four years out of five, rents increased less than the increase in earnings. As a result, by 1979–80, rents were only 6·4 per cent., of earnings which is the lowest proportion on record.

Mr. Frank Allaun: Is not the average rent increase of £5·35 a week in two years required by the Government almost entirely due to the removal of subsidy? Should not the tenants, who are angry, direct that anger not against Labour councillors but against Conservative Ministers, and not attempt to shoot the pianist who is required to play a rotten tune called by the Prime Minister?

Mr. Stanley: The hon. Gentleman will be aware that the new subsidy system does not come into effect until today, which is the beginning of the financial year. Even in 1980–81, rents were still only 6·5 per cent. of earnings. The hon. Gentleman mentioned rent increases of more than £5. That figure ignores one key element in the equation, which is that about 46 per cent. of tenants receive help with their rents through either the rent rebate system or the supplementary benefit system—about 2·4 million tenants. A quarter of all tenants will have their rent increase met in full by the supplementary benefits system. Another one-fifth will normally have 60 per cent. of any increase in rent met by rent rebates. We have also just increased the rent rebate ceilings to £35 a week in London and £30 a week elsewhere.

Mr. Heddle: Will my hon. Friend confirm that 1 million council tenants will face no rent increase?

Mr. Stanley: I confirm that tenants receiving supplementary benefits will have the increase met in full through the supplementary benefits system.

Mrs. Ann Taylor: Will the Minister deny the estimate that, because of the £3·25 increase which the Government have forced on council house tenants, the average council house rent will now be £11 a week—an increase of more than 70 per cent. over the last two years? How many housing revenue accounts will make a profit because of

those high rent levels, and how many councils will have their general rate funds subsidised by the profits made from council house tenants?

Mr. Stanley: The level of rents is a matter for each individual authority. When referring to the surpluses in housing revenue accounts, the hon. Lady should also take account of the enormous switches that have taken place the other way. For example, in Manchester the rate fund contribution to the housing revenue account in 1974–75 was £2·8 million, but last year it was £37·1 million. That represents an enormous burden on ratepayers. I wish that the hon. Lady was as concerned about rate increases which council tenants in Labour authority areas must bear as she is about rents.

Local Authority Expenditure

Mr. Mellor: asked the Secretary of State for the Environment if he will publish the expenditure per capita of each local authority in England.

Mr. King: Local authorities' estimates of total rate-and-grant-borne expenditure per head of population for the 1980–81 financial year are shown in the publication "Financial, General and Rating Statistics 1980–81".

Mr. Mellor: Does my right hon. Friend agree that those figures will show that in inner London and other major urban areas expenditure per head in Labour authorities is markedly higher than in Conservative authorities? Does he also agree that in inner London there is no appreciable difference in services for the extra money which it costs an average ratepayer to live in a Labour borough?

Mr. King: I con firm what my hon. Friend has said. I note that Wandsworth has the lowest expenditure per head of any inner London borough. At present, when so many inner London boroughs wish to preserve employment in their areas, it is clear that Wandsworth council is making a major contribution to that objective by minimising its rate bills.

Mr. Dubs: Does the Minister not accept that expenditure by Labour authorities in inner city areas reflects the social need, disadvantage and deprivation in those areas and that by cutting many necessary services Wandsworth council is doing untold damage to the people that it is supposed to be serving?

Mr. King: If the hon. Gentleman wants to consider this issue seriously, rather than mouth political slogans, invite him to study the recent expenditure analyses of the London boroughs of Camden and Lambeth. They show that it is a total travesty to suggest that high levels of expenditure imply efficient value for money and high levels of service. In both cases, there is undoubtedly gross evidence of waste.

Council House Sales

Mr. Alton: asked the Secretary of State for the Environment if he will give the latest available sales figures under the right-to-buy provisions of the Housing Act 1980 in Tonbridge and Mailing and South Oxfordshire district council aeas; and what are the overall figures for England.

The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg): I refer the hon. Member to the answer my hon. Friend the Minister for Housing and Construction gave him on 27 February.

Mr. Alton: The House will be interested to hear the Minister's reasons for the poor performance of both those local authorities, which have sold a derisory number of council houses. Instead of drawing up hit lists of local authorities which he does not like, would it not be far better to look a bit closer to home?

Mr. Finsberg: I do not understand why the hon. Gentleman should think it is bad when Tonbridge and Mailing has sold 190 houses, all under the previous voluntary effort, and when all 37 applications made in the first quarter of the right-to-buy period have had offer notices. That compares favourably with Liverpool which received 1,601 applications but has made only 221 offers—15 per cent., compared with Tonbridge and Malling's 100 per cent. Incidentally, I am glad to note the hon. Gentleman's interest, since he voted against the right to buy on Third Reading of the Housing Bill.

Mr. Proctor: Is my hon. Friend aware that in Basildon new town more than 2,000 people have bought their homes from the development corporation, which I believe is the highest number of all the new towns in the United Kingdom? Is he also aware that 150 of my constituents living in Billericay and Wickford, who have the misfortune of living in homes owned by the London borough of Waltham Forest, are being frustrated in their desire to take advantage of the right to buy because the council has said that it will process only a handful of applications each month? At the rate it is going, it will take 25 years to process all the applications. Does that not mean that the Secretary of State should use his powers under the Housing Act to ensure that local authorities such as Waltham Forest sell as quickly as possible? [HON. MEMBERS: "Too long."] It is good, though.

Mr. Finsberg: I am grateful to my hon. Friend for that point. It is open to all tenants whose applications are being frustrated to register in the elections in May their dislike of what Labour authorities are doing.

Architectural Competitions

Mr. Anthony Grant: asked the Secretary of State for the Environment if he will ensure that all major Government building developments should be the subject of architectural competitions.

Mr. Steen: asked the Secretary of State for the Environment if he will introduce legislation to ensure that in future all major public building development shall be subject to architectural competition with the private sector.

Mr. Heseltine: I have already announced my intention of holding many more architectural competitions for Government buildings and I have asked other public sector bodies, and private developers, to hold competitions

wherever possible. Not all schemes are suitable for this treatment, and I do not think that legislation would be justified.

Mr. Grant: Is it not ridiculous that town halls throughout the country are knee-deep in highly qualified architects, who are sitting around doing absolutely nothing except waiting for jobs from other local authorities? Would it not benefit ratepayers, the public and architectural standards if local authorities cleared them all out and gave the work to private firms?

Mr. Hesetine: My hon. Friend's heart is in the right place, although as an act of policy he may be inclined to go further than I would, all at once. I support his suggestion that there should be a greater emphasis on the use of the private rather than the public sector.

Mr. Steen: Will my right hon. Friend advise local authorities that, when they are about to embark on new building contracts, they should bring in private architectural firms rather than use their own in-house staff, especially as many provincial urban areas have as many as 300 architects in their departments? If the private firms were brought in, there would be much less standardised design, it would be far more exciting and it would boost private enterprise.

Mr. Heseltine: I support what my hon. Friend has said. I am doing everything that I can in the Department to show, by example, the possibilities which exist.

Mr. Hardy: Given the likely absence of good architectural taste among Conservative Members, may we have a guarantee that the right hon. Gentleman will not choose the judges of such architectural competitions? For example, will he appoint the splendid judges who in Rotherham recently selected a public building in Sunnyside in my constituency, the architect for which is employed in the public sector?

Mr. Heseltine: It may be a relief to the House to know that I am unlikely to make many of these decisions. When one looks at some of the decisions which have been made in the public sector over the years, one could well believe that one has a small contribution to make.

Mr. Chapman: I refute any suggestion of a lack of architectural taste among Conservative Members, and I declare an interest as a non-practising architect. Is my right hon. Friend aware that architects welcome his desire for more open architectural competitions? However, if they are held, public sector architects as well as private sector architects should be able to compete.

Mr. Heseltine: The House will recognise my hon. Friend not only as an expert in architectural practice but as a living embodiment of Conservative architectural taste.

Mr. Pavitt: Ancient monuments.

Mr. Heseltine: In trying to open up the architectural sector to more competition, there will be a wide opportunity for both public sector and private sector architects.

New Towns

Mr. Murphy: asked the Secretary of State for the Environment if he is satisfied with progress on the transfer of assets in first generation new towns.

Mr. Geoffrey Finsberg: Yes, Sir. With some minor exceptions, housing in all the first generation new towns except Basildon was transfered to the appropriate district councils on 1 April 1978. The sale of commercial and industrial assets is proceeding, and we shall shortly announce our proposals for dealing with the first tranche of community related assets.

Mr. Murphy: I thank my hon. Friend for that answer. Does he agree that the disengagement of the Commission for the New Towns should be speeded up for the benefit of the local community, including those business men who wish to have an early opportunity of purchasing their premises?

Mr. Finsberg: As my hon. Friend will know, we have said that the commission will be wound up in due course. The timing is still under consideration. It still has major tasks to undertake in disposing of assets before it can be wound up. We hope that the commission, on a town by town basis, will do its best to dispose of the assets in the best possible way to assist local individuals and businesses.

Mr. Graham: With this experience in mind, does the Minister recall the statement made to the House yesterday on the transfer of housing assets from the GLC to certain London boroughs, in which there was no agreement and no terms? In view of the Government's record of reneging on their promises in respect of the repair of houses in the new towns, why should the new towns or the London boroughs believe a word of what the Minister says?

Mr. Finsberg: I think that they are more likely to believe this Government than the Labour Government, who failed to come to any arrangment on section 10 agreements during the last 18 months or so that they were in power. We have had rounds of discussions and we have now asked the National Building Agency to proceed so as to define a basis of offer not very different from that put forward by the Labour Government, who the hon. Gentleman supported as a Whip. He appears to be anxious to slip out of that now.

Mr. Steen: Is my hon. Friend aware that Conservative Members were looking forward to the Commission for the New Towns being wound up? If it is not to be this year, will it be next year?

Mr. Finsberg: I can only say that it will not be this year.

New Towns

Mr. Dormand: asked the Secretary of State for the Environment if he will make a statement on the future of the North-East new towns.

Mr. Geoffrey Finsberg: I have nothing to add to the reply given to my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) on 20 June last. The target dates for the winding-up of Aycliffe, Peterlee and Washington development corporations have all been set at 31 December 1985.

Mr. Dormand: Does the Minister agree that those three new towns are the major job-attracting centres of an area which needs every job that it can lay hands on? Does he recall, with his right hon. Friend, telling me that the Government would sympathetically consider an extension of the date of winding-up, certainly of the Peterlee

development corporation? Is he aware that because of the threat of winding-up, if I may so describe it, expert staff are already leaving the corporation, which has led to a deterioration of the job-seeking powers? Will the Minister, as a matter of urgency, take on board the seriousness of the situation and reconsider an extension of the life of the Peterlee development corporation?

Mr. Finsberg: I should have hoped that the hon. Gentleman would recognise that we considered the position very carefully. It was because of the success in job creation of the North-East new towns that we decided that Aycliffe and Peterlee should continue until the end of 1985, and the target date announced by the Labour Government for Washington was extended by three years. The hon. Gentleman therefore cannot accuse us of not recognising the immense value of the work done. We have now put the three North-East new towns on the same basis.

Mr. Foster: Is the Minister aware that the new town development corporations were by far the most successful job-hunting agencies in the North-East? Is he aware that there was a net gain of 4,000 jobs in the new town of Newton Aycliffe in the period 1974–79? Is he further aware that with male unemployment rates of 19 per cent. in the town and 24 per cent. elsewhere in South-West Durham, and with the loss of special development area status, the demise of the new town is regarded as the last straw?

Mr. Finsberg: I do not think that what the hon. Gentleman is relaying is necessarily correct. If it was felt that Washington, for example, should have ended in 1982 and we took the decision that, together with Aycliffe and Peterlee, the date should be extended by three years, that demonstrates more clearly than anything else that we believe in the importance of job creation and the other functions of the North-East new towns. We have clearly shown that.

Housing Starts

Dr. McDonald: asked the Secretary of State for the Environment whether, following the expenditure White Paper, he will give an estimate of the expected starts for local council houses in 1981–82.

Mr. Flannery: asked the Secretary of State for the Environment what is now the projected number of starts for (a) private housing and (b) council housing for the present year.

Mr. Douglas-Mann: asked the Secretary of State for the Environment whether he will now give an estimate of the probable number of starts in the public housing sector in the light of the public expenditure White Paper.

Mr. Stanley: In the public sector the number of housing starts will reflect local authorities' decisions as to the proportion of their total single block capital allocation and their total capital receipts that they decide to use for new house building, and in the private sector starts will reflect the decisions of the house building industry.

Dr. McDonald: Has the Minister any evidence to justify the disagreement of his right hon. Friend the Secretary of State with the 1977 Green Paper's prediction that by the mid-1980s there would be a cumulative shortage of half a million homes? If he or his right hon. Friend has any such evidence, will he undertake to publish it forthwith?

Mr. Stanley: The hon. Lady must consider the range of measures that we have taken both to make the best use of available accommodation in the public and the private sectors and to give local authorities the maximum freedom to use their capital receipts to add to their housing investment programme allocations.

Mr. Flannery: Why has the Minister taken refuge in evading the question and not giving figures? He knows that everyone is watching for the figures. Does he realise that in Sheffield alone there is a housing waiting list of 27,000 people and that the sale of council houses will lengthen that waiting list? Is he aware that when his hon. Friends talk about people sitting around doing nothing they should remember that 3 million people are being forced by the Conservative Government to sit around doing nothing when hundreds of thousands of them want to build houses for the people but the Government are preventing them from doing so by the disgracefully low grants that they are offering?

Mr. Stanley: I am glad that the hon. Gentleman referred to the city of Sheffield, as it illustrates my point in reply to the previous question. I hope that the hon. Member will use his influence in Sheffield to get the city council to start processing far more quickly the 3,000 right-to-buy applications sitting in in-trays in the council's offices.

Mr. Douglas-Mann: Is the Minister aware that the rate of public sector housing starts has already fallen below the levels that the Select Committee on the Environment estimated in its report would occur only by 1982–83 and that the monthly approvals rate is already as low as the Committee's worst estimate? Will he have the honesty to admit that, as a consequence of his policies, it is estimated that housing starts are unlikely to exceed 30,000 in each of the next three years—[HON. MEMBERS: "Reading."]—against an average need estimated by local authorities in 1979 and the housing policy Green Paper in 1977—

Mr. Speaker: Order. I think that the hon. Gentleman is giving more information than he is seeking. It is Question Time.

Mr. Douglas-Mann: —as between 110,000 and 120,000 and that his policies are reduced to providing only one-quarter of what is estimated to be needed?

Mr. Stanley: The hon. Member must realise that local authorities can decide between new build and improvement. He has pointed to only one side of the coin. Last year the number of private dwellings that were improved was the highest since 1975, and the number of local authority dwellings that were improved was the highest since 1973. I hope that he will welcome the fact that in the last quarter the number of private sector building starts was up 20 per cent. on the previous quarter.

Mr. Latham: On that point, will my hon. Friend confirm that the latest figures published by the House Builders Federation show a significant and dramatic improvement in the rate of private house building starts?

Mr. Stanley: I am grateful to my hon. Friend. He has drawn the attention of the House to a very important trend which we hope will be sustained.

Mr. Cryer: Does the Minister accept that Bradford local authority applied for a £35 million grant which was

cut by the Tory Government to £21 million, which means that 800 planned starts, in an area with a massive waiting list in which houses are urgently needed, will not now take place in 1981–82? Is he aware that this also means that the building components industry will face further redundancies and that there will be more bricklayers and building workers on the dole, so that the Department of Employment will be paying out in dole pay money that should have gone to the local authority—

Mr. Speaker: Order. The hon. Gentleman is arguing the case instead of asking a question.

Mr. Stanley: In view of the hon. Gentleman's concern about the availability of rented accommodation, I am sure that he will do his utmost to persuade his right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) to reverse his commitment to repeal the shorthold provisions.

Mr. Michael Morris: Instead of worrying too much about the national figure for starts, will my hon. Friend take a long, hard look at all the empty homes in the London boroughs of Islington, Southwark and Lambeth? Will he take the kid gloves off and get those boroughs to produce some modernisation programmes?

Mr. Stanley: I am grateful to my hon. Friend for that question. As he will know, we have said before that a total of 23,000 local authority houses were vacant for more than a year. In view of the steps that we have taken as regards improvement for sale, mortgage guarantees and homesteading, there is no excuse for authorities to have that number of local authority houses vacant for so long.

Mr. Alton: Is the Minister aware that this year the number of housing starts in the public sector is the worst since 1924? Instead of telling council tenants in cities such as Liverpool, where 50,000 people are out of work, that they should buy their own homes, would it not be far better to embark on more council house building? In that way some of the 300,000 unemployed building workers could be taken off the dole.

Mr. Stanley: As the hon. Gentleman knows, local authorities have decided to divert more expenditure into improvements. The number of local authority dwellings that were improved last year was the highest since 1973.

Rate Support Grant

Mr. Dubs: asked the Secretary of State for the Environment what is his estimate of the total sums of money allocated to local authorities from 1981–82 under the rate support grant settlement and which some local authorities will not receive because their expenditure will exceed the grant related expenditure level.

Mr. King: A £9,027 million distribution as between authorities will depend on their relative level of spending.

Mr. Dubs: Is it not a fact that the amount of money allocated to local authorities that will not now be made available to them—because of the working of the block grant system—must be at least £150 million and may well be in excess of that figure? As local government has borne a heavy share of the Government's expenditure cuts, should not the money which is not being made available to local authorities be made available to those authorities in need? Local governments should not have to bear such a heavy burden of the cuts.

Mr. King: I do not quite understand the hon. Gentleman's point. The money that has been allocated under the rate support grant, and under our present proposals, will be allocated to local government. The only thing to be affected by the block grant system is the distribution between authorities. I do not know whether the hon. Gentleman has misunderstood the position. If he wishes to make some other point he should write to me and I shall try to explain the situation.

Mr. Squire: Does my right hon. Friend recognise that several local authorities are concerned about the way in which the penalties have been based on the 1978–79 out-turn, which particularly penalises Conservative-controlled authorities that have complied with successive Government guidelines? Although it is too late for the current year, will my right hon. Friend consider whether some change in the system could be made next year to remove many of the problems that have been thrown up?

Mr. King: There may be a misunderstanding. We have no proposals for penalties against the 1978–79 outturn. We have given an exemption for the 1978–79 outturn against possible contingencies, but we have not yet put any such proposals before this House.

Mr. Pavitt: In settling the rate support grant, does the right hon. Gentleman agree that two factors should be taken into consideration as regards inner city areas such as the one that I represent? I refer first to the impact on the infrastructure. Is he aware that on the Park Royal estate small business after small business is closing down merely because the local authority cannot give the necessary support? Secondly, I refer to the way in which the cut in the rate support grant affects—in this, the International Year of Disabled People—meals on wheels, residential homes for the elderly and home helps. Will not the Minister take a compassionate view?

Mr. King: The most compassionate action that can be taken is to ensure that local authorities—like any other public bodies—achieve value for money and make efficient use of the resources available. The best aid that any authority can give to small businesses is to keep its rate demands low so that they do not represent a further financial charge on businesses.

Mr. Kaufman: Following upon the question asked by the hon. Member for Hornchurch (Mr. Squire), are not the Government's expenditure targets so demented that Cumbria, which has poor services, is liable to be penalised for a 20 per cent. overspend on the Government's targets while Suffolk, which also has poor services and which is Conservative-controlled, is liable to be penalised for a 10 per cent. overspend? Is it not the practice of a police State to impose retrospective penalties for alleged offences that are not offences, but entirely legal decisions? When will the Secretary of State stop acting like the Commissar of Local Government?

Mr. King: The target indicated to local authorities, which is clearly set out in the circular, is one of a 5·6 per cent. reduction against 1978–79 expenditure. To the extent that some local authorities do not achieve that others will have to do more if the overall target is to be met. We have made that clear to the House. There is no question of retrospection, as the right hon. Gentleman might care to admit. Nothing can be imposed before Parliament has approved it. In terms of local government, the word

"commissar" is relevant only to the activities of some Labour-controlled local authorities which wish to make the possession of a party card the criterion for appointment to senior officer level. That is typical of the activity of a commissar. Nothing that we have done is.

Mr. Kaufman: If the right hon. Gentleman is denying that the Government are behaving in such a totalitarian way, will he openly and clearly state which local authorities he will penalise so that they know? Will he also state the penalties that they will be subjected to—which he does not know and will not announce although ratepayers will have to pay for them later in the year? This is the action of a police State and the right hon. Gentleman cannot deny it.

Mr. King: It is interesting to note how quickly the right hon. Gentleman and his colleagues distance themselves from their late colleague the right hon. Anthony Crosland, who recognised the need for economies in local government in his speech to the effect that "the party's over." In that respect, we shall make clear to local authorities the targets that we seek. We shall put such information before the House. At present, we cannot provide any proposals because we have not had the revised budgets. As the right hon. Gentleman knows full well, this Government, like previous Governments, must observe the overall targets for public expenditure.

Fire Precautions

Mr. Joseph Dean: asked the Secretary of State for the Environment if he is yet in a position to make an announcement about the use of his powers under schedule 24 to the Housing Act 1980 relating to fire precautions in hostels and lodging houses.

Mr. Geoffrey Finsberg: I refer the hon. Gentleman to the reply which I gave him on 4 March.

Mr. Dean: I thank the Minister for his reply. Has he seen the recently screened BBC programme "Down and Out", which clearly showed that many people are in grave danger of dying in hostel fires because owners keep the fire doors locked? Is there not a sense of urgency about this matter? Should he not take action immediately under schedule 24 to the Housing Act 1980?

Mr. Finsberg: I must remind the hon. Gentleman that local housing authorities already have powers under schedule 24 to the Housing Act 1980.

Mr. Stallard: Does the hon. Gentleman accept that both his reply of today and that of 4 March will disappoint those of us who are involved with hostels and hostel provision? Is he aware that many of the properties available to hostels and much of hostel accommodation are in need of renovation? Does the hon. Gentleman accept that the Government's policy of forcing councils to cut improvement grants has a serious effect on the provision of hostels and on hostel accommodation? Will he use his influence with his right hon. Friend to ensure that there is an urgent review of the improvement grant allocation to those authorities that face such serious problems?

Mr. Finsberg: The hon. Gentleman must realise three things. First, we gave local authorities powers to act. Secondly, by aggregating all their capital, it is for local authorities to decide how best to spend their money.


Thirdly, many authorities, such as Camden, would have even more capital to spend if they got on with selling council houses to tenants who want to buy them.

Royal Wedding

Mr. William Hamilton: asked the Secretary of State for the Environment, further to his reply to the hon. Member for Leeds, West (Mr. Dean), Official Report, 2 March 1981, col. 57, if he is now able to make an estimate of public expenditure to be incurred by his Department in connection with the forthcoming Royal Wedding.

Mr. Geoffrey Finsberg: No, Sir. Arrangements for the Royal Wedding are at a very early stage of planning and estimates of the costs of the services that the Department has been asked to provide have not yet been made.

Mr. Hamilton: As the Government are imposing savage cuts on housing, education and everything else, is it not absurd and indefensible that they should choose to spend unlimited amounts of taxpayers' money on a jamboree of this kind? Would it not be advisable for the Government to invite the families concerned to pay their own way?

Mr. Finsberg: It would be nice if occasionally the hon. Gentleman did not act in such a curmudgeonly fashion. Whether he likes it or not, there is evidence of vast public support for the Royal Family in general and His Royal Highness in particular. It is fitting that this should find expression on an occasion of such significance as the wedding of the Heir to the Throne. Far from it being a waste of public money it will bring substantial commercial benefits to the country as a whole.

Mr. Stokes: Is my hon. Friend aware that what he has just said reflects the views of the vast mass of this nation? The questioner is in a miserable and tiny minority. Is my hon. Friend aware that the whole nation looks forward with great joy to that splendid occasion?

Mr. Finsberg: My hon. Friend is quite correct. Those who share the view of the hon. Member for Fife, Central (Mr. Hamilton) will doubtless have left the Chamber with him.

Mr. Freud: I agree with the Minister in all that he has said. Will he bear in mind that workshops for the disabled can do a great deal of work to provide bunting and other celebratory materials? Will he say that the Government will give those workshops the work they have in hand?

Mr. Finsberg: That is a point that I shall gladly bear in mind.

Rates

Mr. Robert Atkins: asked the Secretary of State for the Environment if he is satisfied with the levels of rates so far announced for the next financial year.

Mr. Heseltine: On the basis of returns from 98 per cent. of authorities, the average level of general rates in 1981–82 will be 18·4 per cent. higher than this year. The domestic rate increases will be 19·8 per cent. I believe that these increases could have been lower had local government as a whole responded in full to the Government's guidelines.

Mr. Atkins: Does my right hon. Friend have information on the breakdown of those rate increases as between Conservative-controlled and Labour-controlled authorities, bearing in mind, for example, the difference in the borough of Preston, where, from being the lowest rated authority in the United Kingdom, it is now predicted that the increase this year will be 163 per cent., with all the consequent effects for industry and the ratepayers?

Mr. Heseltine: My hon. Friend knows better than most the devastating effects on local employment prospects of electing a Labour council which reverses the prudent housekeeping of a previous Conservative administration. My hon. Friend asked me whether I could give a more detailed breakdown between Conservative and Labour rating decisions. It so happens that I have that information. In the metropolitan districts the Conservative rate increases are projected at 19·63 per cent. and the Labour increases in the equivalent districts are projected at 28·57 per cent. In the outer London boroughs the Conservative rate increases are projected at 24·53 per cent. and the equivalent Labour rates are 44·59 per cent. For the whole of London, Labour authorities are projecting 45·86 per cent., whereas the Conservative authorities are projecting 27·04 per cent. In all the rating authorities controlled by Conservatives in local government, the projected rate increase is 15·26 per cent. and the equivalent—

Mr. Speaker: Order. I realise that the Minister was taken by surprise by the question, but even so he should not take quite so long.

Mr. Heseltine: Of course I accept your ruling, Mr. Speaker, but a large number of people are affected. I have only one more figure to give and that is the comparison between all Conservative-controlled local government authorities, where the increase is 15·26 per cent. and all Labour-controlled authorities, where the figure is 26·83 per cent.

Mr. Anderson: Is the Minister aware that the Royal Borough of Kensington and Chelsea, which is Conservative-controlled, has imposed a rate increase of 50 per cent? What has it done wrong?

Mr. Heseltine: It had the misfortune to have ILEA precepting on it.

Mr. Dykes: I thank my right hon. Friend for his previous spontaneous statistical answer. Will he now give extra impetus to the drive to get independent consultants and accountants into those recalcitrant authorities where the rate increases are excessive, including, regrettably, one or two cases where the authorities are Conservative-controlled?

Mr. Heseltine: My hon. Friend will be aware that we have accountants investigating parts of the Department of the Environment. With the help of the accountants we have managed to reduce water rate increases of 19·6 per cent. to 13 per cent. next year. There is a substantial case for the use of such services by local authorities.

Mr. Frank Allaun: Is it not clear that in the poorer areas the needs are greater and therefore authorities should spend more? Secondly, can the Minister deny that in country areas, although there may be the same proportion of under-fives as in the poorer, deprived areas, the number of children being looked after in those poorer areas is far greater because their mothers have to go out to work? Therefore, the money must be spent.

Mr. Heseltine: The hon. Gentleman will be fully aware that for the first time we have given all the statistics relating to the distribution of grant so that one can have a fair and objective analysis of the way it is happening. Before the hon. Gentleman talks about greater needs, I wish that he and other Opposition Members would remember that the needs that should be considered at the moment are those of the unemployed and industry, which are being accentuated by these over-rating Labour authorities that are destroying jobs as fast as they can.

Footpaths

Mr. Andrew F. Bennett: asked the Secretary of State for the Environment whether he will make a statement on the Government's policy on footpath legislation.

The Under-Secretary of State for the Environment (Mr. Hector Monro): The Government's policy on footpath legislation is contained in the Wildlife and Countryside Bill, as amended on Third Reading in another place.

Mr. Bennett: Is the Minister aware that very many ramblers and walkers are delighted that the Government have had a change in heart in the other place? Will he confirm that they will not seek to alter the Bill and to put it back to its original form? Will he further accept that it is important that the Secretary of State should have the final word on any footpath closures?

Mr. Monro: I agree that we shall not amend the legislation, except perhaps for a tidying-up operation. We accept the principle of the decision that was taken in the other place.

Sir Albert Costain: As a great deal of public expense is caused by people objecting to footpaths when they have never seen a footpath, will the Minister introduce legislation to ensure that people have a real interest before they can object?

Mr. Monro: I accept my hon. Friend's point but in the discussions that we shall have on the Wildlife and Countryside Bill we can no doubt highlight that difficulty and bring home to people that they should make only responsible objections.

Council House Sales

Mrs. Renée Short: asked the Secretary of State for the Environment what communications there have been between his Department and Wolverhampton borough council on the sale of council houses.

Mr. Stanley: Correspondence has taken place between the Department and the council since February. The Department's most recent letter of 27 March indicates that Ministers regard the progress being made by Wolverhampton with referring valuations to the district valuer as unacceptable.

Mrs. Short: Is the Minister aware of the enormous amount of additional work that the sale of council houses causes to local authorities in examining applications and valuing the properties? What work does he suggest that they put to one side to do that? Alternatively, if they have to put the valuations out, how will they pay for them?

Mr. Stanley: If the initial valuations are put out to the district valuer, there is no cost to the authority. I am sure that the hon. Lady will also be aware of the great demand in Wolverhampton from council tenants who wish to buy their own homes. I draw her attention to the fact that the latest letter we have received from Wolverhampton says that, in the view of the council, it will take approximately 60 to 90 weeks—that is nearly two years—even to refer the dwellings concerned to the district valuer for valuation, let alone to complete the sales. I make it clear to Wolverhampton and any other similar-minded local authorities that if they wish to spin out right-to-buy sales until the end of this Parliament the Government are working to a very different timetable.

Mr. Budgen: Will my hon. Friend confirm that over 2,000 applicants now wish to buy their homes in Wolverhampton and that they are experiencing delays and evasions by the council, which show that it wishes to flout the law? Is it not time for the Secretary of State to intervene?

Mr. Stanley: I am sure that my right hon. Friend will have carefully noted that point.

Mr. Winnick: When will the Government show as much enthusiasm for allowing desperately needed council accommodation to be built as they are showing for selling existing dwellings?

Mr. Stanley: I hope that the hon. Gentleman will show similar enthusiasm for local authorities selling council houses, so that they can increase their capital receipts to add to the money available for housing investment.

Transport Bill (Committee)

Mr. David Ennals: On a point of order, Mr. Speaker. I reported to you last night on actions taken by the hon. and learned Member for Beaconsfield (Sir R. Bell), which were witnessed by other hon. Members. You advised me that the complaint concerned privilege, so I give notice that I shall raise the question of the hon. and learned Gentleman's conduct in the normal way for consideration by the Committee of Privileges.

Mr. Speaker: The right hon. Gentleman was correct in writing to me. I know that he does not wish to pre-empt my decision, which I shall announce to the House tomorrow.

Sir Ronald Bell: Further to that point of order, Mr. Speaker. The right hon. Member for Norwich, North (Mr. Ennals) gave me notice that he would raise the point of order. I should be sorry if the right hon. Gentleman felt a sense of grievance about anything that happened yesterday. I do not want any parliamentary colleague to feel a sense of personal grievance. However, I see the affair in a different light. It was known that the guillotine would fall upstairs at a certain time—

Mr. Speaker: Order. The hon. and learned Gentleman should not pursue the argument now. If it is a question of privilege, he, too, should write to me, and I shall give my answer to the House orally tomorrow.

Mr. Roger Moate: Further to that point of order, but not related to privilege, Mr. Speaker. I, too, was endeavouring to table a new clause simultaneously with the Bill being reported by the Clerk, who properly took papers from elsewhere and was clearly in difficulty. There is a procedural problem, as a result of which a new clause supported by a large number of right hon. and hon. Members has been elbowed aside by rather more eccentric new clauses. In the context of the guillotine on Report, considerable difficulty results. When selecting new clauses, would you bear in mind the circumstances and, in particular, do your utmost to protect Back Benchers?

Mr. Speaker: The Procedure Committee has considered the difficulty, of which we are all aware. It is not new. When there is a timetable motion, there is usually an understanding between both sides about the time given to different groups of amendments. I shall do my best to be fair to the House, as usual.

Mr. Ivan Lawrence: Further to that point of order, Mr. Speaker. As one who was standing there at the time, may I point out that the complaints sound like sour grapes from bad losers?

Road Traffic Offences

Mr. Gerry Neale: I beg to move,
That leave be given to bring in a Bill to give powers for the police to detain short-term visitors to Great Britain whom they suspect of having committed serious traffic offences.
The Bill would extend police powers to arrest foreign drivers of vehicles involved in road accidents and to impound vehicles not registered in the United Kingdom involved in road accidents, and to introduce bail bonds for drivers of foreign-registered vehicles entering the United Kingdom. The bond would be in the maximum sum of £5,000 for vehicle damage and £5,000 for each person injured in the accident, and could be required pending the release of the driver and/or vehicle.
The Bill would prevent the evasion of criminal and civil proceedings to the cost of United Kingdom residents involved in accidents by the hurried and uninhibited return by foreigners to their countries of residence.
I give two examples. Two constituents of mine were involved in an accident with a German-registered car driven by a German. The driver was charged but never appeared before the court, so my constituents were unable to establish liability without expensive international court action, and thus suffered substantial loss.
Secondly, a lorry owned and driven by a French onion grower, who came here regularly on business, was involved in a serious accident. The driver was charged, but the summons was not served because he stopped coming here, in order to avoid court proceedings. It could be facetiously said that he knew his onions, and one or two of my hon. Friends may say that it is a good thing if it stops the French selling onions to us, but fair-minded people will join me in maintaining that there is an unfair inadequacy in our law.
I do not argue the merits or demerits of the harmonisation of law in Community member States on the punishment of road traffic offences, but there has been no harmonisation in this area. Driving convictions cannot be enforced and cases cannot be tried in other member States. Despite the European convention on the punishment of road traffic offences, which has been ratified and signed by several nations, the United Kingdom has steadfastly remained non-committal.
Our police have the right of arrest in certain instances, but their powers are insufficient. Drivers of overloaded foreign vehicles entering the country can be arrested only if, having been served with a prohibition order to change the load, they disobey. Foreign drivers can be arrested for drink-driving offences or if they have been disqualified from driving under our road traffic laws. They can also be arrested if they are found to be driving a stolen vehicle. However, it is astonishing that our police have no power to arrest drivers causing death by dangerous driving. They can arrest a driver only if they witness the reckless or careless driving and if the driver then gives false information.
Although there are not many such incidents, United Kingdom citizens involved as third parties suffer consideraable losses. About 1·3 million overseas visitors a year come here by car, which involves about 400,000 vehicles. We are all aware of the foreign trucks and juggernauts that come here.
In this country we are obliged to comply with the criminal and civil laws relating to the use of vehicles on


our roads and to insure for third party risk. It is made as difficult as possible for United Kingdom citizens to avoid their legal liabilities arising out of road accidents. I believe that my Bill would make it more difficult for foreign drivers to avoid their liability. I seek leave to present my Bill to the House.

Question put and agreed to.

Bill ordered to be brought in by Mr. Gerry Neale.

ROAD TRAFFIC OFFENCES

Mr. Gerry Neale accordingly presented a Bill to give powers for the police to detain short-term visitors to Great Britain whom they suspect of having committed serious traffic offences: And the same was read the First time; and ordered to be read a Second time upon Friday 1 May and to be printed [Bill 108].

Orders of the Day — British Telecommunications Bill

As amended (in the Standing Committee), considered.

Mr. Ian Mikardo: On a point of order, Mr. Speaker. I am well aware that your provisional selection of amendments on the Report stage of a Bill is a matter that lies entirely within your discretion. I am equally aware, if I may be allowed to say so, of the great confidence of the House in the way in which you exercise that discretion in this matter as in other matters. I am therefore very diffident about raising this point at all. I do so because I believe genuinely that there is a special point of principle in relation to your decision not to include new clause 8 in the provisional list. Perhaps, Mr. Speaker, you will be kind enought to allow me a moment or two to explain.
I have very much in mind that an almost identical situation, though on a vastly different subject, arose during the' Report stage of the Abortion (Amendment) Bill in the last Session. On that occasion, too, Mr. Speaker, you decided not to include on your provisional list an amendment in relation to what had previously transpired in the course of the Bill but I understand that you were subsequently convinced by some submissions made by one of my right hon. and learned Friends that you should look at it again. You did look at it, while the Bill was going through, and came to a different conclusion.
Part I of the Bill being discussed today concerns telecommunications and part II the postal services. A new clause was moved in Committee, during the passage of part I, to cover the question of telephone tapping. It was read a Second time and the motion to include it in the Bill was carried with the support of hon. Members of all three parties represented on the Committee. It now appears in the Bill as clause 47. Subsequently it was decided, after consultation between hon. Members on both sides, that it needed changing. An amendment later in today's business makes the change.
During discussion of part II of the Bill an identical new clause was moved covering a similar point, namely, the interception of mail. The interception of telephone conversations and the interception of mail are on an equal footing as being interference with the liberties of the citizen. Indeed, the Minister, with his customary open-mindedness and frankness, although he resisted the proposals, admitted that. The points are identical. The new clause connected with the interception of mail was given a Second Reading but the motion to include it in the Bill was defeated by a single vote. New clause 8, with the exception of a single word, follows the pattern of the compromise on telephone tapping that was agreed between hon. Members on both sides
It seems to me, with the utmost respect, Mr. Speaker, that the case for our going over the ground covered by the Committee on telephone tapping is no stronger than that for going over the ground covered by the interception of mail. With the deepest respect, I invite you, Mr. Speaker, harking back to my memories of the occasion in the last Session, and since we have some time between now and the stage when the clause will be reached—there are five


Government new clauses and three amendments to consider—to be kind enough to give further consideration to this matter.

Mr. Stanley Orme: Further to the point of order, Mr. Speaker. I wish to support the case presented by my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo). We have difficulty seeing the difference between telephone tapping and the interception of mail. We also understand that the new clause proposed in Committee was defeated by the casting vote of the Chairman. That normally means that the matter can be brought back to the Floor of the House. It is not a rule, but normally such a course is given serious consideration. For those reasons, Mr. Speaker, I would ask you to consider the point that has been made.

Mr. Speaker: I think that the right hon. Gentleman is not quite correct in what he has said about the casting vote. The matter was not decided by the casting vote of the Chairman. There was a majority of one in the Committee.
I express my deep gratitude to the hon. Member for Bethnal Green and Bow (Mr. Mikardo) for the manner in which he raised his point of order. I am deeply grateful for his reference to me. When amendments have to be selected I naturally spend a lot of time considering them. The provisional list of amendments that I have selected is very long, although I bear in mind that the majority appear to be Government amendments.
I shall look again at the matter in view of the hon. Gentleman's remarks. I am due back in the Chamber later—I do not like to be tied to a time—and I will make a statement when I have looked at the points raised by the hon. Gentleman and by his right hon. Friend.

New Clause 5

MARKING ORDERS

'(1) Where it appears to the Secretary of State expedient that apparatus which is capable of being connected (either directly or indirectly) to a telecommunication system should be marked with or accompanied by any information or instruction relating to the apparatus or its connection or use, the Secretary of State may by order impose requirements for securing that the apparatus is so marked or accompanied, and regulate or prohibit the supply of such apparatus with respect to which the requirements are not complied with; and the requirements may extend to the form and manner in which the information or instruction is to be given.

(2) Where an order under this section is in force with respect to apparatus of any description, any person who, in the course of any trade or business, supplies or offers to supply apparatus of that description in contravention of the order shall, subject to section (Offences under sections (Marking orders) and (Information etc. to be given in advertisements) due to default of third person), be guilty of an offence and liable:

(a) on summary conviction, to a fine not exceeding the statutory maximum;
(b) on conviction on indictment, to imprisonment for a term not exceeding two years, or to a fine, or to both.

(3) An order under this section may make different provision for different circumstances and may, in the case of apparatus supplied in circumstances where the information or instruction required by the order would not be conveyed until after delivery, require the whole or part thereof to be also displayed near the apparatus.

(4) Orders under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(5) For the purposes of this secton a peron exposing apparatus for supply or having apparatus in his possession for supply shall be deemed to offer to supply it.

(6) In this section and section (Information etc. to be given in advertisements) "supply" shall be construed in accordance with section 9 of the Consumer Safety Act 1978 and, in the case of the Corporation, shall be construed as including supply in pursuance of a scheme made under section 17.'—[Mr. Kenneth Baker.]

Brought up, and read the First time.

The Minister for Industry and Information Technology (Mr. Kenneth Baker): I beg to move, That the clause be read a Second time.

Mr. Speaker: With this it will be convenient to take Government new clauses 4, 3 and 2, Government amendment No. 27, and amendment No. 48, in clause 16, page 20, line 13, at end insert—

'(7) The Secretary of State may, after consultation with the Corporation, by order:

(a) impose requirements for securing that any apparatus of a description specified in the order which is supplied or offered for supply in the course of any trade or business, being apparatus of a kind capable of use (either directly of indirectly) with any telecommunications system run by the Corporation:

(i) is to be marked as to indicate whether or not it conforms to a standard approved under subsection (1) of this section or is itself approved under subsection (2) of this section;
(ii) if the Secretary of State thinks fit in the case of any such description of apparatus which so conforms or is so approved, that it is accompanied by information or instruction of a kind specified in the order as to any such conditions, relating to the apparatus, to its connection to such a system, or to its use, as may have been specified in the standard under subsection (1) or in the approval under subsection (2) of this section, as the case may be; and
(b) regulate or prohibit the supply or offer of supply of any such apparatus with respect to which the requirements are not complied with; and the requirements may extend to the form and manner in which the apparatus is to be marked and any information or instruction that is to be given.

(8) For the purposes of an order made under subsection (7) of this section, a description of apparatus may be framed by reference to any circumstances whatsoever.

(9) Where an order under subsection (7) of this section is in force with respect to apparatus of any description, any person who in the course of any trade or business supplies or offers to supply apparatus of that description in contravention of the order shall be guilty of an offence punishable:

(a) on summary conviction by a fine not exceeding £1,000;
(b) on conviction on indictment by a fine or imprisonment for a term not exceeding two years or both.

(10) For the purposes of the foregoing subsection a person exposing apparatus for supply or having apparatus in his possession for supply shall be deemed to offer it for supply.

(11) Where a body corporate is guilty of an offence under subsection (9) of this section and that offence is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate or any person who was purporting to act in any such capacity, he, as well as the body corporate, shall be guilty of the offence and shall be liable to be proceeded against and punished accordingly.

Where the affairs of a body corporate are managed by its members, this subsection shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.

(12) An order made under subsection (7) of this secton shall be made by Statutory Instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.'

Mr. Baker: These new clauses, I believe, will be generally welcome. They set out the consequential stages of the liberalisation of the British Telecom monopoly.
I should like to remind the House what will happen after this Bill is on the statute book. After vesting day, some time this autumn, it will be possible for certain equipment to be offered direct and for sale for attachment to the British Telecommunications network. The monopoly of British Telecom will be retained with regard to the main communication network, the main trunk network and the


right to attach the first telephone to that network. It will be possible, however, for private companies to offer for sale a wide range of equipment to be attached to the network. That equipment will range from simple handsets to answer-phones right through to small PABXs and large PABXs. That is the main element of the derogation from the monopoly of British Telecom.
The process of liberalisation, as my right hon. Friend the Secretary of State made clear when he made his announcement in July last year, will take place over three years. We have chosen three years because we want to give an opportunity for the traditional suppliers to the Post Office, as it now is, to modify their equipment and to design and bring in new equipment which they will be able to offer for sale directly, and not through the Post Office.
The period of liberalisation, as I have pointed out previously, started from my right hon. Friend's statement last July, so the clock started ticking then. Over the three years from last July, the liberalisation period will be complete.
It is our intention to liberalise the simpler equipment first, so that later this year—I hope that it will be later this year—it will be possible to buy ordinary telephone handsets and other equipment of that sort, such as answering machines, which have been approved for sale from shops or companies. It will be quite legal then to affix that equipment to the network.
The Bill, through other clauses, will introduce two main changes. Other companies will be able to supply equipment to the customer, and that will undoubtedly increase the range of choice that is available to the British public. We believe very strongly that that will improve the quality of service and the range of equipment.
Secondly, the requirement that British Telecom should be the body which approves this equipment will be removed, because it would be quite wrong for BT to be in a position of approving both equipment which it is designing and developing and the equipment of the private competitors.
The approval bodies and the approval procedures which we have announced—this is known; I announced it some months ago—are that the British Standards Institution has been asked to draw up standards for this equipment and for a whole range of equipment, and I am glad to tell the House that that work is now going ahead, and that is being done with the co-operation of BT and the private sector. Once those standards have been published it will be possible for suppliers to submit equipment which they think measures up to those standards.

Mr. Albert Roberts: Will the question of safety be involved?

Mr. Baker: Yes. I can absolutely assure the hon. Gentleman that safety is one of the prime requirements of the whole procedure, because it would be irresponsible and dangerous to allow equipment to be attached to the telecommunications network which would, for example, allow a very high electric charge to be passed down so that if someone were working on the line he could be killed. That is a very remote eventuality but, none the less, it is one against which we must guard. Therefore, safety is one of the factors in the procedures that I am explaining.
An independent approvals body, the British Electrotechnical Approvals Board, will examine the equipment and give approval, after it has tested it to ensure that it works properly and meets the safety requirements.

Mr. Orme: Another quango.

Mr. Baker: No, this body exists already, and I am glad to say that it exists in the private sector and has the support and confidence of many companies, including BT. [Interruption.] The right hon. Member for Salford, West (Mr. Orme) should know, because the board has been in existence for several years, during his own period as a member of the Cabinet.
The board will examine the equipment. The purpose of the new clauses is to follow on from that stage. It 'will require equipment to be stamped either "Approval to be attached to the main network" or "Approval not given to be attached to the main network." All equipment that is to be offered for sale must bear either of those marks clearly.
Hon. Members may say "Why should we allow equipment to be marked 'Not approved to be attached to the main network'"? The purpose is to recognise what is now widespread practice—that many private network exchanges within companies, or within even nationalised industries, often attach to their networks equipment which has not measured up to the stringent requirements of the Post Office as regards attachments to the general network,,, because it is a private network and it is therefore very common practice to have equipment attached to that which today has not been approved by BT. That is the purpose of new clause 5.
New clause 4, which is based upon section 9 of the Trade Descriptions Acts, will enable the Secretary of State to make orders requiring that such information should also be given in advertisements for terminal equipment. Many hon. Members will have seen advertisements during the past few months in many papers and magazines, advertising various pieces of telecommunications or telephonic attachments. Some bear the mark that they have been approved. Some have no information on that at all We intend to make it obligatory, by this clause, that the information should be contained clearly in the advertisements so that the purchaser or the would-be purchaser knows from the start whether that equipment has been approved for attachment to the network.
Together with new clause 5, new clause 4 will enable the Secretary of State to require that purchasers of attachments receive adequate information and guidance about terminal equipment and its use so that damage to the network and, indeed, injury to BT employees will be avoided.

Mr. Roger Stott: As the Minister knows, I was a member of the Standing Committee for only a short time. Therefore, I am not au fait with what went on. I ask the Minister one question. Who will be responsible ultimately for the testing of the equipment beyond the prime instrument? Will that responsibility lie with BT?

Mr. Baker: I recognise that the hon. Gentleman was promoted off the Standing Committee when I was promoted on to it. I know that he is very knowledgeable about Post Office matters. The testing of the equipment, in the approval process, will lie with the British Electrotechnical Approvals Board. It will have that responsibility. In the initial stages of the liberalised regime, the board may call upon BT and other research bodies to assist it in that process. I think that that is likely. But the board has taken on this obligation.

Mr. Gregor MacKenzie: I think that all of us understand the points that the Minister has been making about the testing of the equipment, whether it be handsets or anything else. I think that what my hon. Friend the Member for Westhoughton (Mr. Stott) is concerned about, as I am, is who is to test it once it has been fitted to the entire system. After all, BT has an interest in the entire system and in preserving it. We want to know who, once it is connected, will test it. Secondly, does new clause 4 contain—I cannot see it, closely as I have looked at the clause—the power of entry to ensure that such a test has taken place?

Mr. Baker: The testing of equipment after its original approval is the job of the BEAB. If it is approved for attachment to the network, if it is the first telephone in a home, BT has the obligation to attach it, but it could be a private telephone. If subsequent attachments are needed, as long as the equipment is approved it could be attached by either BT or, in private companies, by other suppliers. I made that clear in reply to a question yesterday.
I do not know whether the right hon. Member for Rutherglen (Mr. MacKenzie) wants to raise the question of maintenance at this stage. I think that it will probably arise later.

Mr. MacKenzie: I am sure that the Minister will be answering my question on new clause 4. I was speaking purely of testing. Does the new clause contain the power of entry so that such a test can be carried out once a connection has been made?

Mr. Baker: I have nothing more to say on testing after the equipment has been tested, installed and commissioned. For domestic homes it will be installed by BT. I reconfirm that BT will have the monopoly for the single telephone instrument in the home. This is a central part of our proposal, and has been generally welcomed by the Post Office Engineering Union and by suppliers and users, all of whom are concerned about the integrity of the network.

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Mr. Stott: I shall hunt the hon. Gentleman on this point. Let me give him a practical example. I do not know how many shared lines still exist, but I believe that there are quite a few. If BT fits the primary instrument on a shared service line and another company later adds other instruments to the shared line, it is possible that the system would work, because a shared service works through ringing to earth. But unless a balanced test is made from a central point—the test desk in the exchange—the calls of one subscriber could be metered on the other subscriber meter. The testing must be done centrally. It cannot be done at the prime instrument. One has to ring the exchange and have a balanced test done. If a private enterprise organisation were to fit any plan set numbers from the prime instrument, would it have to ring British Telecom's test desk and ask for it to be tested? If that happens, will it be done on an agency basis?

Mr. Baker: That is nothing new. In fact, the matter was debated in Committee. That argument is always used in connection with shared lines. If, in the example that the hon. Gentleman gave, there were a dispute about whether the part that BT linked to the network was faulty, or whether a part linked by the private contractor was faulty,

both parties might need to be involved in the test process. That is quite possible. Much of the testing in future will be done by BT, as happens now.
I turn to new clause 4, which deals with advertisements. As in the case of the Trade Descriptions and Consumer Safety Acts, suppliers or advertisers who do not comply with orders under either of these clauses will be guilty of an offence and fined up to £1,000 and, if convicted on indictment, sent to prison for up to two years.
New clause 3 provides for prosecution of a person who misleads a supplier into infringing a marking or information order and creates statutory defences where a supplier or advertiser unwittingly commits an offence. This, too, is based on provisions in the Trade Descriptions Act.
Before dealing with powers of entry, I shall explain new clause 2, which is being taken with amendment No. 27. It is consequential upon new clauses 4 and 5, which introduce marking order and information order provisions for telecommunications attachments. It is a standard provision, which enables the responsible individual to be prosecuted when a body corporate commits an offence. Otherwise, technically, only the body itself could be proceeded against. We want the provision to apply to offences under new clauses 4 and 5, as it applies to offences against similar provisions in the Trade Descriptions Act. It already applies to offences under clause 12(3). The simplest method is to introduce this new clause, which will apply to all offences under the Bill, and remove subsection (3), which will be done by amendment No. 27.
We consider that this is an effective regime to police the quality of equipment that is offered for sale. It is a matter of real concern in the new liberalised regime that the equipment should not only work but be entirely safe. It should be clear to anyone who is offered the equipment for sale whether it is so approved.
The hon. Gentleman mentioned enforcement powers. We are still considering the matter. We have been advised that the existing powers under the Trade Descriptions Act are sufficient and that the powers of entry are sufficient. However, I wish to be certain that that is so, because the powers of entry will be to the premises of retailers—and possibly suppliers, wholesalers and manufacturers—to ensure that the equipment that they are offering for sale is properly marked. I accept that the clauses, as drafted, do not include specific enforcement powers of entry. We are considering whether specific powers are necessary, and if we so decide we shall add them in another place.
Considerable doubt has been expressed on the question whether the powers are necessary, and I want to satisfy myself before asking the House for new powers of entry which are extremely wide. Certainly, we have doubts about them where they affect retailers, because the evidence could be easily acquired by someone going into a shop and buying the equipment. It will be marked "Approved for attachment" or "Not approved", or there will be no mark at all. So the evidence will be there. However, there may be difficulty if the equipment is not offered for sale through a shop. I am considering the matter, and I hope that what I have said will satisfy the Opposition.
Fraudulent or incorrect marking will be enforceable under the Trade Descriptions Act whenever it amounts to a false trade description. It will be in the interests of the private suppliers of equipment, just as much as in the


interests of BT, that the approval procedure that I have outlined should be properly followed. It is in the interests of BT for obvious reasons. It is in the interests of private suppliers because they go through an elaborate procedure and a long process of design and developing equipment, and they do not want their equipment, to be undercut by equipment which does not meet the specification and which may be faulty.
I hope therefore, that the Opposition will welcome the new clauses. I gave undertakings in Committee to bring forward proposals on those lines, and I hope that they will be found satisfactory.

Mr. Speaker: Before I call the right hon. Member for Salford, West (Mr. Orme), I wish to say that I looked with care at new clause 8 while the Minister was speaking. Bearing in mind the arguments that were advanced by the hon. Member for Bethnal Green and Bow (Mr. Mikardo), I propose to allow new clause 8 to be discussed with amendment No. 54 and the group of amendments that are being taken at the same time. Therefore, the main debate on amendment No. 54 will be brought forward. The discussion will take place on new clause 8 together with amendment No. 54, amendment (a), amendment (b) and Government amendment No. 53. It will be possible for hon. Members to vote both on new clause 8 and on amendment No. 54.

Mr. Orme: I thank you for that decision, Mr. Speaker. My hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) is elsewhere on business affecting the Bill. Your decision means, of course, that new clause 6 will be discussed after the debate on this group of new clauses, and it thus alters the seriatim of the debate. Your decision is most welcome.

Mr. Speaker: I am obliged to the right hon. Gentleman. My decision may please him more than it pleases other right hon. and hon. Members, but it means that new clause 8 will now be debated after new clause 6, and that the series of amendments on telephone tapping will be taken at the same time.

Mr. Orme: My hon. Friend the Member for Westhoughton (Mr. Stott) raised an important point on the development of private industry which could be brought into the home—a point on which the Minister was trying to offer protection. I hope that the hon. Geentleman's assurances are better than those that he gave about PABXs in Committee, because he has obviously changed his mind on that point.
We shall be discussing the detailed and central issues on later amendments and therefore we shall not pursue the matter on the new clauses. The Minister has gone some way to meet the case that we put in Committee, but we shall debate that in detail on later amendments.

Question put and agreed to.

Clause read a Second time, and added to the Bill

New Clause 4

INFORMATION ETC. TO BE GIVEN IN ADVERTISEMENTS

'(1) Where it appears to the Secretary of State expedient that any description of advertisements of apparatus which is capable of being connected (either directly or indirectly) to a telecommunication system should contain or refer to any information relating to the apparatus or its connection or use, the Secretary of State may by order impose requirements as to the inclusion of that information, or an indication of the means by which it may be obtained, in such description of advertisements of the apparatus as may be specified in the order.

(2) Where an advertisement of any apparatus to be supplied in the course of any trade or business fails to comply with any requirement imposed under this section, any person who publishes the advertisement shall, subject to section (Offences under sections (Marking orders) and (Information etc. to be given in advertisements) due to default of third person), be guilty of an offence and liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum;
(b) on conviction on indictment, to imprisonment for a term not exceeding two years, or to a fine or to both.

(3) An order under this section may specify the form and manner in which any information or indication required by the order is to be included in advertisements of any description and may make different provision for different circumstances.

(4) Orders under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(5) In this section "advertisement" includes a catalogue, a circular and a price list.'—[Mr. Kenneth Baker.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 3

OFFENCES UNDER SECTIONS (MARKING ORDERS) AND (INFORMATION ETC. TO BE GIVEN IN ADVERTISEMENTS) DUE TO DEFAULT OF THIRD PERSON

'(1) Where the commission by any person of an offence under section (Marking orders) or (Information etc. to be given in advertisements) is due to the act or default of some other person that other person shall be guilty of the offence, and a person may be charged with and convicted of the offence by virtue of this subsection whether or not proceedings are taken against the first-mentioned person.

(2) In any proceedings for an offence under section (Marking orders) or (Information etc. to be given in advertisements) it shall, subject to subsection (3), be a defence for the person charged to prove that he took all reasonable steps and exercised all due diligence to avoid committing the offence.

(3) Where the defence provided by subsection (2) involves an allegation that the commission of the offence was due to the act or default of another person the person charged shall not, without leave of the court, be entitled to rely on that defence unless, within a period ending seven clear days before the hearing, he has served on the prosecutor a notice in writing giving such information identifying or assisting in the identification of that other person as was then in his possession.

(4) In any proceedings for an offence under section (Information etc. to be given in advertisements) it shall be a defence for the person charged to prove that he is a person whose business it is to publish or arrange for the publication of advertisements and that he received the advertisement; for publication in the ordinary course of business and did not know and had no reason to suspect that its publication would amount to an offence under that section.'—[Mr. Kenneth Baker.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 2

OFFENCES BY BODIES CORPORATE ETC.

'(1) Where a body corporate is guilty of an offence under this Act and that offence is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate or any person who was purporting to act in any such capacity, he, as well as the body corporate, shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

(2) Where the affairs of a body corporate are managed by its members, subsection (1) shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.'.—[Mr. Kenneth Baker.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 1

POWER OF MANAGERS OF CERTAIN WELFARE FUNDS TO PRESERVE THEIR SCOPE

'(1) A fund to which this section applies is one (whether described by the addition thereto of the attribute "welfare", "benevolent" or "mutual aid" or by the addition thereto of any other attribute) the objects of which consist in, or include the provision for—

(a) persons who are, or have been, employees of the Post Office, or for such persons of any class of description; or
(b) for the relatives and dependants of any persons who are or have been, so employed, or of such persons of any class or description,
of benefits in case of need, sickness or distress, and a society or organisation to which this section applies is one (however described) the objects of which are similar; and in this section—
managers"in relation to a fund, society or organisation, means the trustees committee or other persons entrusted with its management;
relevant body" means the Corporation or any of its subsidiaries or any subsidiary of the Post Office.

(2) The provisions of the trust deed, rules, regulations or other instrument constituting or regulating a fund, society or organisation to which this section applies may, by resolution of the managers of the fund, society or organisation, be altered—

(a) so as to permit persons who are employees (past or present) of a relevant body or persons who are members of a class of persons of that description, to become members of, or subscribers to, the fund, society or organisation;
(b) so as, in the case of persons of the said description or persons who are members of a class of persons of that description, to entitle them and persons claiming in right of them (subject to such, if any, terms and conditions as may be specified in the resolution) to receive benefits from the fund, society or organisation if, and to the extent that, they would be entitled to receive benefits therefrom if employment by a relevant body were employment by the Post Office; 
but so that no alteration be made that alters the character of the fund, society or organisation.

(3) If a resolution of the managers of a fund, society or organisation to which this section applies so provides—

(a) any reference in the trust deed, rules, regulations or other instrument constituting or regulating the fund, society or organisation to the Post Office (not being a reference in a context referring, in whatever terms, to persons employed by the Post Office or persons so employed of a specified description) shall be construed as referring (or, if the context so requires, as including a reference) to a relevant body; and
(b) any reference in that instrument, in whatever terms, to persons so employed or persons so employed of a specified description shall be construed as referring (or, if the context so requires, as including a reference)

to persons employed by a relevant body or, as the case may be, to persons so employed of a corresponding description.

(4) For the purposes of a resolution deriving validity from this section, the definition of a class of persons may be framed by reference to any circumstances whatever.'.—[Mr. Michael Marshall.]

Brought up, and read the First time.

The Under-Secretary of State for Industry (Mr. Michael Marshall): I beg to move, that the clause be read a Second time.

Mr. Speaker: With this, we may take Government amendment No. 56.

Mr. Marshall: The effect of the new clause and the consequential amendment is to extend clause 54, which already enables the managers of welfare funds to change their rules by resolution, to allow past or present employees of BT or its wholly owned subsidiaries to belong to the trusts or to allow their dependants to receive benefits.
The proposal removes the need for what may be a lengthy formal procedure to make such changes. The clause is to be extended so that similar changes can be made in respect of employees of any subsidiary of either BT or the Post Office. The extended clause will relate to both corporations and therefore has to be moved to part III of the Bill. Clause 54 will then be unnecessary.
There seems to be no reason why welfare funds should not be able to extend their coverage in this way without undue difficulty, and I hope that the House will agree with the obvious good sense of the new clause.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 6

RIGHT TO STRIKE

'(1) No person being an employee of the Post Office or of British Telecommunications shall be guilty of an offence under any of the statutory provisions referred to in subsection (4) of this section if the conduct complained of takes place exclusively or primarily in contemplation or furtherance of a trade dispute with either the Post Office or British Telecommunications.

(2) No person shall be guilty of soliciting, inciting or procuring or attempting to solicit, incite or procure or aiding or abetting the commission by any employee of the Post Office or British Telecommunications of an offence under any of the statutory provisions referred to in subsection (4) (other than subsection (4) (c)) of this section unless it be established that one or more of the persons so solicited, incited or procured, or aided or abetted or in relation to them an attempt to solicit, incite or procure as aforesaid is alleged to have been made would not have been entitled to the immunity conferred by subsection (1) in the event of his or their being charged with the relevant substantive offence under any of the said provisions.

(3) Where in pursuance of any agreement the acts in question in relation to any of the offences referred to in subsection (4) hereof are to be done exclusively or primarily in contemplation or furtherance of a trade dispute with either the Post Office or British Telecommunications that offence or those offences are to be disregarded for the purposes of section 1(1) of the Criminal Law Act 1977.

(4) The statutory provisions referred to in this section are:—

(a) section 55 of the Post Office Act 1953, as amended, insofar as that section makes it an offence for any person or, when required by an officer of the Post Office, to neglect or refuse to deliver up any postal packet in the circumstances there described;
(b) section 58(1) of the Post Office Act 1953, as amended, insofar as that section makes it an offence fox' any officer of the Post Office, contrary to his duty, to wilfully detain or delay or procure or suffer to be detained or delayed any


postal packet in the course of transmission by post;
(c) section 68 of the Post Office Act 1953;
(d) section 45 of the Telegraph Act 1863, insofar as that section makes it an offence for any person employed by the Post Office wilfully to omit or delay to transmit or deliver any message or by any wilful act or omission to prevent or delay the transmission or delivery of any message; and
(e) section 20 of the Telegraph Act 1868, as amended, insofar as that section makes it an offence for any person having official duties connected with the Post Office, or acting on behalf of the Postmaster General, contrary to his duty, to intercept the contents or any part of the contents of any telegraphic messages or any message entrusted to the Postmaster General for the purpose of transmission.

(5) In this section a reference to "trade dispute" has the same meaning as in the Trade Union and Labour Relations Act 1974.'.—[Mr. Charles R. Morris.]

Brought up, and read the First time.

Mr. Charles R. Morris: I beg to move, that the clause be read a Second time.
As will be observed, the clause concerns itself with the rights, as employees, of 400,000 postal and telecommunications workers. I argue that those workers are largely a loyal and dedicated group of public servants. They are industrial moderates, and by no stretch of the imagination could one describe them as industrial militants.
I contend that it is unjust, discriminatory and unfair that postal and telecommunications workers, almost alone among Britain's 8 million trade unionists, face the possibility of legal challenge if they exercise what I believe to be a basic right that is enjoyed by every other group of organised workers—the right to withdraw their labour and participate in industrial action.
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The legal challenge to which I have referred stems from legal provisions that were never intended for that purpose. The clauses of the Post Office Act 1953 that expose postal and telecommunications staff to legal penalties go back to 1710, when the General Post Office was first established, during Queen Anne's reign. At that time the legal provisions were aimed primarily at footpads and highwaymen, but those same provisions have become a convenience for organisations such as the National Association for Freedom and individuals such as Mr. Gouriet to launch legal actions against the staff of the Post Office and telecommunications corporations exercising their rights as workers and trade unionists.
I believe that common justice demands that those legal impediments should be removed. In November 1976, when the postal workers boycotted mail to Grunwick Processing Laboratories, doubt arose whether postal workers could legally withdraw their labour. In order to stop the postal workers' boycott the NAFF took out an injunction alleging that postal workers were committing a criminal offence by being in breach of the Post Office Act 1953.
On the assurance that the company would agree to arbitration, the postal workers suspended their industrial action, but the issue was not put to the test until January 1977, when the NAFF asked the Attorney-General of the day to institute an injunction against the Union of Post Office Workers and the Post Office Engineering Union over plans to boycott post and telecommunications to South Africa.
The Attorney-General refused that application, but the NAFF obtained the support of the Appeal Court, presided over by the Master of the Rolls, Lord Denning. The court

decided that the unions were violating the Post Office and Telegraph Acts and issued an injunction. Lord Denning stated that it was clearly an offence to
wilfully delay or detain the mails
to interfere with telephone calls, or to procure others to do so. Although the House of Lords decided in July 1977 that the Appeal Court had acted wrongly in granting the injunction, the issues at stake were not primarily about the right to strike. The Law Lords endorsed Lord Denning's view that it was a criminal offence to black mail or telephone calls. The issues before the Law Lords concerned the question whether the Attorney-General's discretion should be challenged by the courts and whether any citizen could bypass him and obtain an injunction against a trade union.
Therefore, the unions' victory in the House of Lords prevented postal workers from being the target only of civil injunctions. They remain to this day as vulnerable to criminal prosecution if they decide to withdraw their labour. As Lord Diplock put it:
that such conduct by postal workers would constitute a criminal offence punishable upon indictment by imprisonment or a fine is plainly beyond argument.
The object of the new clause is to remove the legal anomaly afflicting workers in the Post Office and British Telecommunications by ensuring that they cannot be subjected to criminal prosecution when engaged in industrial action. Existing provisions would remain in force to prevent strictly criminal interference with mail and telecommunications. The clause merely seeks to exempt industrial action from the type of legal provisions to which I referred.
In Committee we were privileged to have the presence of the right hon. and learned Gentleman the Attorney-General to give us the benefit of his knowledge and guidance in considering a similar new clause that I moved at that stage. With the greatest respect, I question whether the advice that we received from him helped either the Committee or the Post Office workers. The Attorney-General said:
There is no fetter under the Post Office Act 1953 or the Telegraph Act 1863 upon Post Office workers … to withdraw their labour as such.
Counsel's opinion obtained by the Union of Communication Workers in 1977 stated that in the event of an all-out strike the position was, at best, too uncertain for comfort and, at worst, made it illegal for Post Office or British Telecommunications workers to contemplate such action. Tom Jackson, the general secretary of the UCW, on 17 March 1981 sent a copy of that counsel's opinion to the Minister of State, and I am confident that the hon. Gentleman received it.
I hope that Ministers read that opinion carefully. Here we have two conflicting opinions on a serious issue. The implication is that if a prosecution were ever launched against postal or telecommunications workers, one judge might interpret the law as did the Attorney-General whereas another might agree with the counsel's opinion that has been submitted to the Minister of State. That would be an impossible situation, and I ask the Minister to accept the clause, which is modest in its scope and effect.
I stress that we have the benefit both of counsel's opinion in 1977 and the legal advice given by the Attorney-General in Committee. I can only repeat what I


said previously, that the Attorney-General's opinion expressed in Committee did not satisfy either side of the argument.
Counsel also stated something that the Attorney-General and the Minister, in his letter to the general secretary of the UCW, conceded, namely, that anything less than a complete withdrawal of labour would be illegal. That position is intolerable. Why should postal and telecommunications workers be penalised for involving themselves in overtime bans, for working to rule, refusing to cross a picket line, or for short-term stoppages? What possible justification is there for imposing legal penalties in those circumstances of industrial difficulty?
In Committee the Attorney-General said:
Some forms of industrial action which fall short of strike action, while such employees remain at work, may fall foul of the law … It is impossible to advise the Committee in firm terms which are also general terms, because every case must be looked at on its own facts, and industrial action which falls short of full withdrawal of labour may take a number of forms."—[Official Report, Standing Committee B,3 March 1981; c. 581–2.]
The Attorney-General said that a ban on voluntary overtime could not attract legal proceedings. But what of postmen and postmen higher-grade who perform overtime as part of their normal duty arrangements which are agreed with management? If they engage in the withdrawal of labour, can it not be legally construed as breaking their contract of employment?
What a ludricrous position the Attorney-General and the Government are supporting. They are saying, in effect, that it is "all out or nothing". They suggest that postal and telecommunications workers should take 100 per cent. strike action or not bother at all, because lesser forms of industrial action might land them in court. What started as a discussion in Committee about the right to strike finished with almost an incentive to strike. Why should they bother to work to rule, which might make them liable to criminal prosecution, if they can go on all-out strike and suffer no such legal impediment? That is the logic of the argument that we heard in Committee.
I hope that the Government and the Minister will accept the clause, for one central reason—the views expressed on this issue not in Committee, not on Second Reading in December, but by the Conservative Opposition spokesman in 1978. The then hon. Member for Kingston upon Thames (Mr. Lamont), who is now a Minister, spoke for the Conservative Opposition during the Second Reading of a Private Member's Bill introduced by my hon. Friend the Member for Renfrewshire, West (Mr.Buchan), which sought to do precisely that which I am doing in the clause. He said that he supported the restricted right of industrial action against the employer and made this very telling point:
We recognise that Post Office workers feel that they are in a unique position. They feel that whilst others, such as the electricity workers, have the right … the Post Office workers are in an anomalous position, and I should find it difficult to argue that Post Office workers are more like policemen than like power workers … When Post Office workers say that they are in the almost unique position of not having the right to strike, it should be pointed out that they are also in the privileged position of being a statutorily protected monopoly; and if it is right to reconsider the sanctions against strike action, it must be also right that the position of the monopoly should be reconsidered."—[Official Report, 17 February 1978; Vol. 944, c. 885–92.]

The Bill takes steps to alter the Post Office and telecommunications monopoly. Let the Government accept the clause and restore the legal right of postal and telecommunications workers to exercise the right enjoyed by every other group of organised trade unionists. I ask that in the interests of fairness and justice.

Mr. John Golding: The Attorney-General attended the Committee to give us free legal advice. I wish that we had paid our 7s 6d and received fuller advice. It was disturbing to listen to the Attorney-General, because he could not tell us whether industrial action or other action was legal. It is important for the Post Office and British Telecommunications trade unions to know whether it is legal to take action.
I was disturbed to hear that when the 7s 6d was paid for further advice, the advice put us in further uncertainty. That uncertainty should be removed by the Government accepting the new clause. The trade union movement regards the Bill without the new clause as totally hostile. Trade unionists believe that when they go to court they never have the benefit of the doubt. Because of the prejudices of judges, if there is an element of doubt in legislation the court will find against the trade union.
The Attorney-General is huffing and puffing on the Front Bench. I remind him that he is here to give an impartial opinion. The Government should accept the new clause so that Post Office and British Telecommunications workers are certain about their right to strike.
I did not add my name to the names of those who support the new clause; nor did Ito a similar amendment in Committee. The reason is clear. The Post Office Engineering Union does not believe that the clause goes far enough. It relates only to industrial matters. It does not give Post Office and British Telecommunications workers the right to strike on political grounds. That is not satisfactory. Post Office and British Telecommunications workers should have the same right to strike as have other workers. The right to strike should not be restricted in that way.
I appreciate that the drafting of the new clause includes workers in British Telecommunications and the Post Office and protects permanent and full-time officers of the trade unions. However, I wish that the new clause were stronger. I wish that it afforded a complete right to strike to British Telecommunications and Post Office workers. Because it is imperative that the right to strike is laid down in statute, I shall support my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris) in the Lobby.

Mr. Mikardo: I wish to make only three points in support of the new clause. The first is wide and general and applies to many Bills. The issue has been discussed in the House and in Committee many times. It is directly applicable to the Bill and the new clause. It is that the more the majesty of the law intervenes in industrial relations the worse industrial relations become and the more danger there is of severe industrial disruption.
People should think back. They should remember Ernest Bevin's attempt to use the law against the Kent miners, in the delicate period towards the end of and immediately after the war. If ever there were a time when the law could have been used against people who were thought to lessen the war effort by absenting themselves from work, that was the time. Ernest Bevin invoked the law against the Kent miners.
What was the upshot? A few miners were proceeded against under the law. A few went to prison. That was all very fine, except that nobody dug any coal. One can do many things with the law but one cannot dig coal with it. Lawyers can do many things, but they cannot dig coal. Ministers who feel that they are tough guys because they have the power of the law behind them can do many things, but they cannot dig coal. They cannot deliver letters. They cannot connect telephone circuits. History, starting with Ernest Bevin, shows that if work is not being done because of an industrial dispute one cannot get it done merely by invoking the law.
There was only one way to get the coal out of the Kent coalfields, and that was to get the Kent miners out of prison. The only way to get them out of prison was for the fines to be paid. But it was the non-payment of the fines that resulted in their going to prison. The miners refused to pay the fines. The then permanent Secretary to the Ministry of Labour recounts, in a brilliant document printed as an annex to the Donovan report, how he went to the prison to beg the miners' leaders to come out. They did not want to come out.
If the law were invoked today I am sure that the present Minister would find himself in exactly the same position. It is no good arguing about the difference between criminal and civil law, because in the end sanctions have to be applied and chaps will not pay fines. In the end the Government have to do something.
The same applied to the "Pentonville Five". Hon. Members whose memories do not go back as far as the Kent miners might remember the Pentonville Five. The law that operated then was brilliant—much better than that contained in the Bill. The Act under which the Industrial Relations Court was set up, and its powers, were carefully thought out and perfectly drawn. They gave the Administration total power to deal with chaps who went on strike. The power was exercised and five dockers found themselves in court. Then they found themselves in Pentonville.
I do not know how they reacted to that—perhaps they were not worried about it—but the Government reacted with enthusiasm. They thought, "This is it. We have solved all the problems." They had solved the problems except for one small difficulty—that as long as those five fellows were in Pentonville no cargo was being loaded or unloaded at the docks. Apart from that small difference, everything in the garden was lovely. The law had come down in all its majesty on these wicked sinners and shown them where to get off. Over and over again exactly the same thing happens.
When we discussed this matter in Standing Committee my hon. Friend the Member for Leeds, West (Mr. Dean) said that there had been a situation similar to that of the Pentonville Five in Australia. I reminded him that if we were crossing the waters we did not have to go as far as that, because a few years ago electricity workers in the Republic of Ireland came out on strike and their leaders were put into gaol; the Irish Government had copied the powers that we had and they put the strikers into gaol. That was fine, except that there was no electricity.
The Irish Government had another problem which Her Majesty's Government did not have—they did not have an Official Solicitor. In the case of the Pentonville Five, somebody in the Government—I dare say it was one of the predecessors of the Attorney-General—discovered in some dusty archive a reference to the Official Solicitor, a

being that nobody knew existed, but who had powers, apparently, to do almost anything. So they dug up the Official Solicitor from the recesses of the cave in which he had doubtless been immured and sent him to the Industrial Relations Court to get the Pentonville Five out. But the poor old Irish Government did not have an official solicitor so how were they to get those electrical union leaders out of gaol?
The Irish Government knew that the minute the leaders were out of gaol, or the following day, there would be some electricity. So what happened was that a high-level ministerial deputation went to Mountjoy gaol to see those criminals, those convicts, and to beg them on their bended knees to walk out of the prison. They said that, the Governor had been given a chit which said that he could let them out.
The leader of the electrical workers looked at his watch and said, "We can't go out now; the buses have stopped; it is too late and we would have to walk all the way home." The leader of the ministerial delegation said, "Don't worry about that. We will get you some taxis to take you home" whereupon the leader of the electrical trade union said, "We can't have that; that would be a terrible waste of taxpayers' money. We had better stay in the jug until tomorrow morning." And they stayed in the calaboose until the following morning, so the absence of electricity continued for several hours longer than it otherwise would have.
That is the sort of idiotic situation which we get into when we try to use legal prohibitions to replace the skills of man management in industry which should create good relations between management and workers. That is the sort of mess that we have always got into, and that is the sort of mess that we will get into again, without these proposals.
That is the first general ground on which I support the new clause. I come now to the second general point.
Whenever we discuss this matter, people say, "Yes, the right to strike, the right to withdraw labour, as a last resort, must be permitted in a free society." After all, the row in Poland is about exactly that. All that my right hon Friend is asking for is the same rights for members of his union as Mr. Lech Walesa is demanding for members of his union in Poland, to the great plaudits of all the British press and everybody else in this country—not least members of the Conservative Party.
That is all we are asking for; that is all my right hon. Friend is asking for. It seems that all right hon. and hon. Gentlemen opposite are in favour of a worker having the right to strike in the last resort—as long as he is a Polish worker and not a worker in the British Post Office. If that is not the case, I shall be grateful if the Minister will explain the difference.
4.45 pm
Solidarity in Poland has achieved recognition of the right of workers in the Polish postal service to strike. They have that right, but it is being denied to workers in Great Britain, and Conservative Members will make weekend speeches saying what a lovely free country ours is compared with a wicked Communist country like Poland. It bears thinking about, does it not, even by right hon. and hon. Members opposite?
At one time, when work was less specialised than it is today, a case could have been made for saying that there were certain essential services from whose workers this


general right should be withheld because they were vital to the maintenance of the realm. But the situation in industry has changed—not because the workers have changed it but because the employers have changed it, and for a good reason. It has changed largely because of the great advances in technology and because in using those advances we have carried the economic division of labour further and further in our industrial and service processes. More and more, industry is being carried on by a larger and larger number of smaller and smaller processes. A single break in the chain, which may involve a single process and only a small number of workers, can often bring the whole lot to a standstill.
I will take a simple trade to illustrate that point. The older ones among us can recall the days when tailoring was done—I remember when I first went to the East End of London—by a chap sitting on his haunches on a table. He measured the customer, marked out the cloth, cut the cloth, felled it together for a try-on, sewed it, finished it and then pressed it. He did everything, all the way through, perhaps with the help of his wife or his daughter. Nowadays, in a modern clothing factory, it takes 148 separate processes to make an ordinary two-piece suit.
In the more technologically advanced industries—the metal-working industries, the industries in which shop progress and control are carried out automatically and electronically by computers—that tailoring analogy is carried to the nth degree.
There is now not one manufacturing industry in this country in which a major process, perhaps involving thousands of people, cannot be stopped by half a dozen people. Are they essential workers or are they not? For example, if I were organising workers in the engineering industry I would never call out on strike an engineering factory with perhaps 5,000, 6,000 or 7,000 people in it. I would call out the 8 or 10 tool grinders. All the rest could go to work and they would be working away cheerfully until all their tools got blunt and there was nobody to regrind them; then the place would stop. Those are clearly essential workers. No one is demanding that the right to strike should be withdrawn from them, because no one can define them. It is not possible to form a clear enough definition to make them the subject of statutory action.
It is true that soldiers, sailors and airmen cannot strike, but half a dozen computer operators in the Ministry of Defence could make all our soldiers, sailors and airmen idle. Those computer operators have the right to strike and some of them are striking now. No one is taking any disciplinary action against them—let alone any civil or criminal action in the courts.
Post Office engineers are essential workers. We should suffer great loss and inconvenience without a telephone service or a postal service, but what would happen if sewerage men came out on strike? Those workers have the right to strike. They have recently obtained a wage increase by threatening to strike. If they came out on strike the result would be not loss or inconvenience but an epidemic. Are sewerage workers less essential than postmen or telecommunications engineers?
A relatively small work force is employed in our public health laboratories. They protect millions from epidemics. They have the right to strike. How does the Minister justify

those workers having that right when postmen are not to be given it? That is a simple question and I hope that the Minister will answer it.
The Minister may say, "We are concerned that postal and telecommunications workers could bring the machinery of government to a halt if they went on strike." The machinery of government could be brought to a halt in the next few weeks, with all the postmen and telecommunication engineers working, by the Government going skint, running out of money. I have read that 80 senior tax bods have gone out on strike and that those few workers have reduced the Government's revenue by £300 million a week. Are they essential workers? Are they doing less damage to the running of the country than would be done by postal workers at the East London district sorting office, in my constituency, deciding to go on strike? Who decides who is an essential worker and who is not? I have given some examples but anyone in the Chamber could list 30, 40 or 50 classifications of workers from whom, the right to strike could be withdrawn on the same basis as from postal and telecommunications workers. Why is there such discrimination? Why are the postal and telecommunications men getting it in the neck?
Not all postal workers are being denied the right to strike. It is only the employees of the Post Office who are being so deprived. Under the Bill the monopoly is being broken. There will be private postal services as well as companies operating the private postal services as well as services provided by the Post Office. Employees of the companies operating the private postal services will have the right to strike. Is the Minister saying that they will have the right to strike because their work is less essential than the work of the postmen who will be working for the Post Office?
I imagine that the first development of private postal services is likely to be in the City of London. The City of London could be brought to a halt by "postmen"—they will not be called that, but they will be de facto postmen—working for private postal delivery companies. Those chaps could feel aggrieved with their lot at the same time as the postmen working for the Post Office feel aggrieved with their lot. One lot would have the right to strike and the other lot would not. How could such a situation be jusified?
The very provision which is being made for breaking the monopoly ought as a logical consequence to lead to the conclusion that as we cannot deny the right to strike to a certain class of worker working for one employer we cannot deny that right to an identical class of worker working for a different employer. We know that the Government will break their necks to favour the private sector against the public sector on all counts. However, even they must baulk at such outrageous discrimination.
Those are the three grounds on which I hope that the House will give full support to the clause.

Mr. David Alton: I rise briefly to support the remarks of the hon. Member for Bethnal Green and Bow (Mr. Mikado), which were particularly well said. I support the new clause moved by the right hon. Member for Manchester, Openshaw (Mr. Morris), as I did in Committee. I do so because we are confronted once again by an example of double standards, namely, some groups of workers being treated differently from others. We are dealing with one of the last vestiges of the


relationship that the Government believe managements should have with their employees, one that is not dissimilar from the relationship enjoyed by the barons when dealing with serfs in medieval times. It is about time that we ridded ourselves of these last vestiges and accepted that postal workers should have the same rights as any other group of workers in terms of industrial relations.
It seems that the Government believe that postal workers will be irresponsible, will exercise no discretion and will rush into endless strikes, thus sabotaging the nation's affairs. That I dispute. In Committee many hon. Members, including Conservative Members, said frequently that they accepted postal workers as being responsible members of the community who make a great contribution to the nation's affairs. If they believe that, why do they seek to deny postal workers the rights that have been given to others? In discussing the new clause we are talking about confidence in postal workers as well as the basic principle of the right to strike.
Strike action is not the most desirable way of settling an industrial dispute. In Committee we had a memorable debate on workers having a say in the running of their own affairs, worker participation and the need to involve the work force to a greater extent. If the Government meant what they said and if they did not merely mouth pious platitudes, this is an opportunity to put their theories into practice. I do not believe that the use of bully-boy tactics or industrial muscle is normally associated with postal workers. In the main they have always shown respect, integrity and great discipline in the running of their affairs.

Mr. Robert Hughes: The hon. Gentleman is in some danger of equating strike action with bully-boy tactics. If he is seeking to equate the two, he should not use such language.

Mr. Alton: I am glad that the hon. Member made that point.
There are occasions when strike action is misused. We have all seen examples of its being used wrongly by workers as a first resort rather than a last resort. That is often unofficial strike action, wildcat strikes, and so on, for which I have no time. Official union action, when it is seen as the way in which to bring an industrial dispute to a reasonable conclusion, has been fought for for over 100 years. We must maintain that. Over that time, trade unions have improved working conditions and have obtained better remuneration for their workers. They must be proud of that. Sometimes strike action has been the only legitimate way to achieve that. That is why people should have that right. It is not a right which is lightly used by trade unions. I do not want to give that impression. That right is usually used by most responsible trade unions in a discreet way when no other action can be taken.
5 pm
The clause is about our attitude towards our workers. The Secretary of State normally talks about confrontation in industry. If anyone knows anything about that it is the Secretary of State, because he seems to believe in sending a gunboat on every possible occasion. He abides by the principle that if two wrongs do not make a right, try a third. He constantly resorts to confrontation rather than co-operation.
This is an opportunity for the Minister to tell his right hon. Friend that in this matter he can show some respect for postal workers and people in whom the country has had

utmost confidence in the past. The Secretary of State can show that we accept that postal workers are responsible people who would not use the right to strike irresponsibly and that we accept that they would use that right only as a last resort, as any other worker or striker would be able to do. Therefore, we should not have double standards among different groups of workers.

Mr. John McWilliam: I listened carefully to the Minister and to the Attorney-General in Committee, when the Minister defended his opposition to the new clause tabled by my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris). It became clear in Committee that there was some doubt about the exact status of the law in this area. It reminded me of all those occasions when there has been some doubt about the law on industrial relations.
In almost every case of industrial action, a judge in a court has made a decision. That decision, which may have been legally right, has resulted in problems for the industry concerned, for its workers, for the law and problems concerning respect for the law. The history of industrial law has been bedevilled by judges who, sometimes deliberately but more often because of the obscurity of the law, have proceeded on the basis that the workers must be wrong.
It takes two to make an argument. It is not necessarily the case that the fault is on one side or the other. All that we are asking for in the new clause is that Post Office workers should have the same rights as every other worker in this country and the same rights as every other worker in any country which calls itself democratic. As my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) said, they should be the same rights as those possessed even by workers in a Communist country such as Poland. That is all we ask—nothing more.
If the Minister is to support his contention that the new clause should be voted down, I invite him at the same time to state clearly the intentions of the Government on industrial relations law relating to every other section of workers. Is he saying that the Government's attitude to the clause represents Government policy on industrial relations in general? Will all employees be subjected to the Government pushing through a draconian law which will prevent them from exercising their legal and democratic right in a democratic society to say to an employer that they will not work for him on the terms offered by him, that they are not prepared to accept his edict, that they want to talk about it and, if he will not do so, they will not work? We are confronted by that situation today. It is a question not only of the rights of postal workers but of the Government's attitude to the rights of all employees in this society. I hope that the Minister will be prepared to answer that point.
If the Minister is saying that he is picking on the Post Office workers as a group particularly prone to industrial action, he has picked on the wrong group. The industrial history of the Post Office has been one of the best, not just in this country, but in any country. Industrial action in the Post Office has occurred only in the face of the most blatant provocation. Is this law a precursor for other draconian laws on industrial relations? Has the Minister a specific problem with the Post Office? If he has such a problem, what is it?

Mr. Kenneth Baker: As I am not a lawyer, I approach with great humility any debate on the law relating to


industrial relations because it is a complex area of law. I appreciate that the Labour Party feels that the law should intervene as little as possible in that area. I have not counted the number of pages of industrial relations legislation in the statute book, but I dare say that more has been put on the statute book by the Labour Party than by the Conservative Party. I am only too well aware that the changes over the years often make complicated positions more complicated because the circumstances of each dispute are often so different and complicated.
I appreciate the moderate and sensibe way in which the right hon. Member for Manchester, Openshaw (Mr. Morris) spoke to the clause. I do not want to be associated with the allegations that Post Office workers are irresponsible and militant, because they are not. They have served the country well under successive Governments for years.
As hon. Members are aware, this matter was discussed at considerable length in Committee. On that occasion, the Opposition expressed their deep concern that if Post Office and British Telecom workers were to take industrial action in furtherance of a trade dispute with their employer they could be held to be committing an offence under one of several provisions of the Post Office Act 1953 and the Telegraph Act 1863. Effectively, therefore, they argued that Post Office workers did not have the right to strike. That point was argued by the hon. Members for Bethnal Green and Bow (Mr. Mikardo) and for Liverpool, Edge Hill (Mr. Alton).
We were fortunate to have the attendance in Committee of my right hon. and learned Friend the Attorney-General, who took great pains to give the Committee his impartial interpretation of the legal position.
He said that in his view,
There is no fetter under the Post Office Act 1953 or the Telegraph Act 1863 upon Post Office workers, or whatever they will become when the Bill is enacted, to withdraw teir labour as such."—[Official Report, Standing Committee B, 3 March 1981; c. 581.]
That disposes of the argument that there is a double standard.
However, my right hon. and learned Friend went on to say that some forms of industrial action falling short of strike action while such employees remained at work may—I emphasise the word "may"—fall foul of the law. Expanding on that remark, he said that although each case of industrial action short of total withdrawal of labour would have to be considered on the facts, he did not consider that a conviction would be possible under any of the provisions in question where it could not be proved that the employee was in breach of his contractual obligations.
Several examples were raised in Committee. For example, withdrawal of voluntary overtime and genuine working to rule do not, in my right hon. and learned Friend's opinion, amount to an offence. However, he considered that discriminatory action against particular individuals or countries would justify prosecution, although none had been launched to date. Indeed, no prosecutions under a wider area than that have been launched in the history of this legislation.
My right hon. and learned Friend suggested that the Committee might not welcome legislation to create an immunity for such activities. That is certainly the Government's view. In sum, the Attorney-General felt that

there was no need to clarify the legal position, as he had no doubt that Post Office workers had the right to strike. I emphasise that.

Mr. Charles R. Morris: Does the Minister agree that the right hon. and learned Gentleman argued that this all turned on what was meant by "wilful delay"? On a number of occasions he emphasised that this issue turned on the interpretation and construction placed on the word "wilful".

Mr. Baker: "Wilful and negligent", in fact. However, that has been the position since the Telegraph Act 1863. If this matter is of such vital concern to Labour Members, I remind them that between 1974 and 1979 they had plenty of opportunity to introduce legislation along these lines. After all, a great amount of industrial legislation went through the House at that time.

Mr. Orme: This issue did not arise until the Grunwick dispute, when legal action was threatened against the postal workers for delaying mail and not delivering it to that firm. It then became evident that a flaw existed.

Mr. Baker: I need not remind the right hon. Gentleman that that dispute took place in 1977 and that there was not a general election until 1979. Therefore, there was plenty of opportunity to do something under the Lib-Lab pact. After all, the Liberal Party has thrown its support behind the Oppositon today. It is no good saying that the Labour Party was in a minority. If Labour Members felt so strongly, they had two years to do something about it, but they did nothing. The right hon. Gentleman was a member of the Cabinet. Is he telling us that he put forward proposals for the new clause and the thinking behind it?

Mr. Orme: Despite what the hon. Member for Liverpool, Edge Hill (Mr. Alton) said, the Liberal Party was not prepared to support trade union legislation. We had great difficulty in carrying the Liberal Party with us on a series of issues. That ought to be made known to the House.

Mr. Baker: We do not even have to await the right hon. Gentleman's memoirs on this interesting period of the Lib-Lab pact I never imagined that we would get a cameo of what happened during that time. At present, the stock in trade of the leader of the Liberal Party is to say that those two years were the glorious Utopia of post-war British politics. Yet on the authority of a former senior Cabinet Minister we are told that the Liberal Party was not prepared to support the proposals which have been advocated this afternoon.

Mr. Alton: The Minister will appreciate that I was not a Member of the House during the period of the Lib-Lab pact. I have checked with the Liberal Chief Whip, and I can assure the House that at that time the Government never made proposals to repeal the law along those lines. We would be reluctant to see the introduction of the kind of trade union legislation which some members of Labour's Left wing would like to see, and we would of course exercise a restraining influence in such circumstances.

Mr. Baker: We now have volume 2 of the memoirs. The hon. Gentleman cannot hide behind the argument that he was not a Member of the House, because he was fighting to get into the House.
I do not know whether members of the Social Democratic Party have any views. Two of them are in the Chamber, and it would be interesting to know whether they have any views about the necessity for this piece of legislation.
The antecedents and credibility of the Opposition are suspect, because they had the opportunity to do something about this matter.

Mr. John Gorst: I remind my hon. Friend that during the period to which he referred a Private Member's Bill was introduced to give effect to this proposal. It was widely supported in the Lobby by everyone, from Cabinet Ministers downwards, but it never had the imprimatur of Government approval.

Mr. Baker: I shall refer to that Bill in a moment, I confirm my hon. Friend's recollection.
Since our debate in Committee I have had correspondence with Mr. Tom Jackson, who courteously sent me the legal opinion that he received. I thank him for it. I studied it carefully and sent it to my right hon. and learned Friend. We have discussed it together. After careful consideration of that opinion, he saw nothing in it which led him to change his view.

Mr. Robert Hughes: Who will determine whether the Attorney-General is right or whether the legal opinion given to the Union of Communication Workers is right?

Mr. Baker: The courts would ultimately do that. That position has prevailed in the country over the centuries. We are not advocating anything new.

Mr. Bob Cryer: rose—

Mr. Hughes: rose—

Mr. Baker: I give way, to the hon. Member for Aberdeen, North (Mr. Hughes).

Mr. Hughes: I am grateful to the Minister for again giving way, because I should like to follow up this point. He must understand that the whole purpose of new clause 6 is to avoid the courts being brought into arbitration, where they can only do harm. Surely it would be far better to clarify the law for the avoidance of doubt, which I gather is a famous legal phrase.

Mr. Baker: I shall reply to the hon. Gentleman in a moment, when I discuss whether the new clause will clarify the position in the way in which the hon. Gentleman and his right hon. friend think. I shall try to show that it will not.
This is a complex issue, for which it is difficult to draft legislation. This was clearly demonstrated in 1978, when a Private Member's Bill was considered by the House, as my hon. Friend the Member for Hendon, North (Mr. Gorst) reminded us. The new clause as drafted—I am not making pettifogging points—contains one or two important loopholes.
Under subsection (1), it seems that employees of the Post Office could take industrial action in furtherance of a trade dispute with British Telecommunications and vice versa. I do not believe that that is the intention of those who drafted the new clause, but that is its effect.
Subsection (1) refers to conduct taking place
exclusively or primarily in contemplation or furtherance of a trade dispute".

What exactly does that mean? Those words appear to plant further mines in an area which is already a notorious legal minefield. Then again, I have already said that I do not believe that it would be desirable for discriminatory action such as I have already described to be exempt from the offences listed in subsection (4) of the new clause.
That is certainly the view of Conservative Members, and I hope that it would be the view of the Liberal Party as well. There is no mention of this anywhere in the new clause. This is surely an important point which should he clearly provided for. Thus, although I am sure that the right hon. Gentleman's aim is that the clause should be narrowly drawn, I think that it is faulty in those respects.
In Committee, the right hon. Member for Openshaw quoted my hon. Friends who had spoken in support of the Private Member's Bill back in 1978. I must chide him for quoting somewhat selectively from that debate. Selective quotation is a bad habit, which he must have picked up when he was a Minister. My hon. Friends the Members for Kingston-upon-Thames (Mr. Lamont) and Surrey, North-West (Mr. Grylls) both spoke at that time in favour of Post Office workers having the right to strike. I would not argue with that principle and, for the reasons that I gave earlier, I do not believe that that is under debate today. What is under debate is the question whether it is necessary to lay down in statute a provision saying that this is the case. To quote my hon. Friend the Member for Kingston-upon-Thames, there is all the difference in the world between the right to strike in a dispute with the Post Office and the right to take discriminatory action against particular users.
I come back to the legal advice given to the Committee and the House by my right hon. and learned Friend the Attorney-General. He has given his opinion that Post Office and—after the separation of the business—British Telecom workers have the right to strike already and that they would not be committing an offence by withdrawing their labour.
For reasons that I have described, I cannot accept the new clause as drafted because I believe that it contains several undesirable features, but in any case feel, in the light of the legal advice, I do not feel that it is necessary. I hope that the right hon. Gentleman will agree and seek

Mr. Orme: I support the new clause and hope that the Opposition will shortly be voting for it. The Ministers remarks have been completely unsatisfactory. He says that the right to strike exists and that both unions can take that action—the Post Office workers' strike lasted for about seven weeks—but that if they try to take any other form of industrial action they are up against the courts and are prevented from taking it. As my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) said, those are double standards. It was the Grunwick case which brought this to the attention of the country and the House. If the new clause is imperfect, or if, as the Minister says, it is contradictory in some ways and could be improved, let the Government improve it by giving a guarantee to the House that they will put it right in another place. The Minister is not prepared to do that.

Mr. Cryer: Will my right hon. Friend comment on an even grosser example of double standards that the Government have exhibited? They find all kinds of grave legal difficulties with the clause and they talk about leaving matters to the courts when trade unionists and the


right to strike action are involved, but the Attorney-General and the Government had no scruples whatever when people in high places, some of them titled, were in breach of sanctions against Rhodesia. On that occasion the Attorney-General rushed to the House to make it clear beyond peradventure that there was clear immunity for those who had undertaken criminal actions—in all probability because they were close to some of those high-sounding people in the Tory Party. That certainly shows double standards.

Mr. Orme: I accept what my hon. Friend says. If the Post Office workers had continued their action against Grunwick and been prosecuted, would the Attorney-General have asked the House for immunity? Would he do so in a similar case now? I believe that he would not. The Minister of State is correct to say that we are not in favour of legislation on the right to strike. The right to strike or to take industrial action should exist automatically. It should not depend upon Acts of 1710 or 1863. These matters go back as far as that—to such things as the interception of mail by footpads or riotous behaviour during the delivery of mail, which are now linked to modern industrial action in modern society.
We are therefore debating the important principle that people should have the right to withdraw their labour and to take secondary industrial action if necessary, which, in a sense, may not go as far as the right to strike. The Minister is clearly saying that if workers have a grievance they should go on strike, because if they attempt to take any other form of action it could be termed illegal—that anything short of complete withdrawal is illegal.

The Attorney-General (Sir Michael Havers): The right hon. Gentleman cannot have read what I said to the Committee. I set out in detail a whole range of other occasions, of which he has completely forgotten to remind the House and on which I said that no criminal proceedings would follow. I hope that the right hon. Gentleman will be more accurate in the remainder of his speech.

Mr. Orme: I have read the right hon. and learned Gentleman's speech, but if the matter is as clear-cut as he says, why will the Government not accept the new clause, which makes the position clear, or table a suitable amendment of their own to clarify the situation?

Mr. Mikardo: The Attorney-General cannot get away from the fact that in terms of secondary action postal workers have placed upon them certain inhibitions which are not placed upon other workers. That is the double standard. Those inhibitions will be placed upon postal workers employed by the Post Office but not upon those employed by private companies. The right hon. and learned Gentleman cannot get away from that.

Mr. Orme: I agree with my hon. Friend. What the Attorney-General talked about in the Committee was wilful and negligent delay which could lead to legal proceedings. We have given examples of what such wilful and negligent delay could amount to.
The Post Office unions are incensed at the situation. Those unions do not lightly strike or take industrial action. They therefore cannot see why they should be treated differently from other unions in the public service.
On that basis, I ask my right hon. and hon. Friends to vote for the clause.

Question put, That the Clause be read a Second time:—

The House divided: Ayes 231, Noes 287.

Division No. 132]
[5.30 pm


AYES


Abse, Leo
Fletcher, Ted (Darlington)


Adams, Allen
Foot, Rt Hon Michael


Allaun, Frank
Ford, Ben


Alton, David
Forrester, John


Anderson, Donald
Foster, Derek


Archer, Rt Hon Peter
Foulkes, George


Ashton, Joe
Fraser, J. (Lamb'th, N'w'd)


Atkinson, N.(H'gey,)
Freeson, Rt Hon Reginald


Barnett, Guy (Greenwich)
Freud, Clement


Barnett, Rt Hon Joel (H'wd)
Garrett, John (Norwich S)


Beith, A. J.
Garrett, W. E. (Wallsend)


Benn, Rt Hon A. Wedgwood
George, Bruce


Bennett, Andrew (St'kp't N)
Gilbert, Rt Hon Dr John


Bidwell, Sydney
Ginsburg, David


Booth, Rt Hon Albert
Golding, John


Boothroyd, Miss Betty
Gourlay, Harry


Bottomley, Rt Hon A. (M'b'ro)
Graham, Ted


Bradley, Tom
Grant, George (Morpeth)


Bray, Dr Jeremy
Grant, John (Islington C)


Brocklebank-Fowler, C.
Hamilton, W. W. (C'tral Fife)


Brown, Hugh D. (Provan)
Hardy, Peter


Brown, R. C. (N'castle W)
Harrison, Rt Hon Walter


Brown, Ron (E'burgh, Leith)
Hart, Rt Hon Dame Judith


Brown, Ronald W. (H'ckn'y S)
Hattersley, Rt Hon Roy


Callaghan, Rt Hon J.
Haynes, Frank


Callaghan, Jim (Midd't'n &amp; P)
Hogg, N. (E Dunb't'nshire)


Campbell, Ian
Holland, S. (L'b'th, Vauxh'll)


Campbell-Savours, Dale
Home Robertson, John


Cant, R. B.
Homewood, William


Carmichael, Neil
Hooley, Frank


Cartwright, John
Horam, John


Clark, Dr David (S Shields)
Huckfield, Les


Cocks, Rt Hon M. (B'stol S)
Hudson Davies, Gwilym E.


Coleman, Donald
Hughes, Mark (Durham)


Cook, Robin F.
Hughes, Robert (Aberdeen N)


Cowans, Harry
Hughes, Roy (Newport)


Cox, T. (W'dsw'th, Toot'g)
Janner, Hon Greville


Crawshaw, Richard
Jay, Rt Hon Douglas


Crowther, J. S.
John, Brynmor


Cryer, Bob
Johnson, James (Hull West)


Cunliffe, Lawrence
Johnston, Russell (Inverness)


Cunningham, G. (Islington S)
Jones, Barry (East Flint)


Cunningham, Dr J. (W'h'n)
Jones, Dan (Burnley)


Dalyell, Tam
Kaufman, Rt Hon Gerald


Davidson, Arthur
Kilroy-Silk, Robert


Davies, Rt Hon Denzil (L'lli)
Lamond, James


Davies, Ifor (Gower)
Leadbitter, Ted


Davis, T. (B'ham, Stechf'd)
Leighton, Ronald


Deakins, Eric
Lewis, Arthur (N'ham NW)


Dean, Joseph (Leeds West)
Lewis, Ron (Carlisle)


Dempsey, James
Litherland, Robert


Dewar, Donald
Lofthouse, Geoffrey


Dixon, Donald
Lyons, Edward (Bradf'd W)


Dobson, Frank
Mabon, Rt Hon Dr J. Dickson


Dormand, Jack
McDonald, Dr Oonagh


Douglas, Dick
McElhone, Frank


Douglas-Mann, Bruce
McGuire, Michael (Ince)


Dubs, Alfred
McKay, Allen (Penistone)


Duffy, A. E. P.
McKelvey, William


Dunnett, Jack
MacKenzie, Rt Hon Gregor


Dunwoody, Hon Mrs G.
Maclennan, Robert


Eadie, Alex
McNally, Thomas


Eastham, Ken
McNamara, Kevin


Edwards, R. (W'hampt'n S E)
McTaggart, Robert


Ellis, R. (NE D'bysh're)
McWilliam, John


Ellis, Tom (Wrexham)
Magee, Bryan


English, Michael
Marshall, Dr Edmund (Goole)


Ennals, Rt Hon David
Marshall, Jim (Leicester S)


Evans, Ioan (Aberdare)
Martin, M (G'gow S'burn)


Evans, John (Newton)
Mason, Rt Hon Roy


Field, Frank
Maxton, John


Fitt, Gerard
Mellish, Rt Hon Robert


Flannery, Martin
Mikardo, Ian


Fletcher, Raymond (Ilkeston)
Millan, Rt Hon Bruce






Mitchell, Austin (Grimsby)
Stewart, Rt Hon D. (W Isles)


Morris, Rt Hon C. (O'shaw)
Stoddart, David


Morris, Rt Hon J. (Aberavon)
Stott, Roger


Morton, George
Strang, Gavin


Moyle, Rt Hon Roland
Straw, Jack


Oakes, Rt Hon Gordon
Summerskill, Hon Dr Shirley


Ogden, Eric
Taylor, Mrs Ann (Bolton W)


O'Halloran, Michael
Thomas, Dafydd (Merioneth)


O'Neill, Martin
Thomas, Jeffrey (Abertillery)


Orme, Rt Hon Stanley
Thomas, Mike (Newcastle E)


Parker, John
Thomas, Dr R.(Carmarthen)


Pavitt, Laurie
Thorne, Stan (Preston South)


Pendry, Tom
Tilley, John


Penhaligon, David
Tinn, James


Powell, Raymond (Ogmore)
Urwin, Rt Hon Tom


Prescott, John
Varley, Rt Hon Eric G.


Price, C. (Lewisham W)
Wainwright, E.(Dearne V)


Race, Reg
Wainwright, R.(Colne V)


Rees, Rt Hon M (Leeds S)
Walker, Rt Hon H.(D'caster)


Richardson, Jo
Watkins, David


Roberts, Albert (Normanton)
Weetch, Ken


Roberts, Allan (Bootle)
Welsh, Michael


Roberts, Ernest (Hackney N)
White, Frank R.


Roberts, Gwilym (Cannock)
White, J. (G'gow Pollok)


Robertson, George
Whitehead, Phillip


Rooker, J. W.
Whitlock, William


Roper, John
Wigley, Dafydd


Ross, Ernest (Dundee West)
Willey, Rt Hon Frederick


Rowlands, Ted
Williams, Rt Hon A.(S'sea W)


Ryman, John
Williams, Sir T.(W'ton)


Sandelson, Neville
Wilson, Gordon (Dundee E)


Sheerman, Barry
Wilson, Rt Hon Sir H.(H'ton)


Sheldon, Rt Hon R.
Wilson, William (C'try SE)


Shore, Rt Hon Peter
Winnick, David


Short, Mrs Renée
Woodall, Alec


Silkin, Rt Hon J. (Deptford)
Woolmer, Kenneth


Silverman, Julius
Wrigglesworth, Ian


Skinner, Dennis
Wright, Sheila


Snape, Peter
Young, David (Bolton E)


Soley, Clive



Spearing, Nigel
Tellers for the Ayes:


Spriggs, Leslie
Mr. James Hamilton and Mr. Hugh McCartney.


Stallard, A. W.



Steel, Rt Hon David





NOES


Adley, Robert
Brooke, Hon Peter


Aitken, Jonathan
Brotherton, Michael


Alexander, Richard
Brown, Michael (Brigg &amp; Sc'n)


Alison, Michael
Browne, John (Winchester)


Amery, Rt Hon Julian
Bruce-Gardyne, John


Ancram, Michael
Bryan, Sir Paul


Arnold, Tom
Buck, Antony


Aspinwall, Jack
Budgen, Nick


Atkins, Rt Hon H.(S'thorne)
Bulmer, Esmond


Atkins, Robert(Preston N)
Burden, Sir Frederick


Atkinson, David (B'm'th. E)
Butcher, John


Baker, Kenneth (St. M'bone)
Cadbury, Jocelyn


Baker, Nicholas (N Dorset)
Carlisle, John (Luton West)


Banks, Robert
Carlisle, Kenneth (Lincoln)


Beaumont-Dark, Anthony
Chalker, Mrs. Lynda


Bell, Sir Ronald
Channon, Rt. Hon. Paul


Bendall, Vivian
Chapman, Sydney


Bennett, Sir Frederic (T'bay)
Churchill, W. S.


Benyon, Thomas (A'don)
Clark, Hon A. (Plym'th, S'n)


Benyon, W. (Buckingham)
Clark, Sir W. (Croydon S)


Best, Keith
Clarke, Kenneth (Rushcliffe)


Bevan, David Gilroy
Clegg, Sir Walter


Biffen, Rt Hon John
Cockeram, Eric


Biggs-Davison, John
Cope, John


Blackburn, John
Corrie, John


Bonsor, Sir Nicholas
Costain, Sir Albert


Boscawen, Hon Robert
Cranborne, Viscount


Bottomley, Peter (W'wich W)
Critchley, Julian


Bowden, Andrew
Crouch, David


Boyson, Dr Rhodes
Dean, Paul (North Somerset)


Bradford, Rev R.
Dorrell, Stephen


Braine, Sir Bernard
Douglas-Hamilton, Lord J.


Bright, Graham
du Cann, Rt Hon Edward


Brittan, Leon
Dunn, Robert (Dartford)





Durant, Tony
Lester, Jim (Beeston)


Dykes, Hugh
Lloyd, Ian (Havant &amp; W'loo)


Eden, Rt Hon Sir John
Lloyd, Peter (Fareham)


Eggar, Tim
Loveridge, John


Eyre, Reginald
Luce, Richard


Fairbairn, Nicholas
McCrindle, Robert


Faith, Mrs Sheila
McCusker, H.


Farr, John
Macfarlane, Neil


Fenner, Mrs Peggy
MacGregor, John


Finsberg, Geoffrey
MacKay, John (Argyll)


Fisher, Sir Nigel
Macmillan, Rt Hon M.


Fletcher, A. (Ed'nb'gh N)
McNair-Wilson, M. (N'bury)


Fletcher-Cooke, Sir Charles
McNair-Wilson, P. (New F'st)


Fookes, Miss Janet
McQuarrie, Albert


Forman, Nigel
Madel, David


Fowler, Rt Hon Norman
Major, John


Fox, Marcus
Marland, Paul


Fraser, Rt Hon Sir Hugh
Marlow, Tony


Fraser, Peter (South Angus)
Marshall, Michael (Arundel)


Fry, Peter
Marten, Neil (Banbury)


Gardiner, George (Reigate)
Mates, Michael


Gardner, Edward (S Fylde)
Maude, Rt Hon Sir Angus


Garel-Jones, Tristan
Mawby, Ray


Gilmour, Rt Hon Sir Ian
Mawhinney, Dr Brian


Glyn, Dr Alan
Maxwell-Hyslop, Robin


Goodlad, Alastair
Mayhew, Patrick


Gorst, John
Mellor, David


Gower, Sir Raymond
Meyer, Sir Anthony


Grant, Anthony (Harrow C)
Miller, Hal (B'grove)


Gray, Hamish
Mills, Iain (Meriden)


Greenway, Harry
Mills, Peter (West Devon)


Grieve, Percy
Moate, Roger


Griffiths, E.(B'y St. Edm'ds)
Monro, Hector


Griffiths, Peter Portsm'th N)
Montgomery, Fergus


Grist, Ian
Moore, John


Grylls, Michael
Morgan, Geraint


Gummer, John Selwyn
Morris, M. (N'hampton S)


Hamilton, Hon A.
Morrison, Hon C. (Devizes)


Hamilton, Michael (Salisbury)
Morrison, Hon P. (Chester)


Hampson, Dr Keith
Mudd, David


Hannam, John
Murphy, Christopher


Haselhurst, Alan
Neale, Gerrard


Hastings, Stephen
Needham, Richard


Havers, Rt Hon Sir Michael
Nelson, Anthony


Hawkins, Paul
Neubert, Michael


Hawksley, Warren
Newton, Tony


Hayhoe, Barney
Onslow, Cranley


Heddle, John
Oppenheim, Rt Hon Mrs S.


Henderson, Barry
Osborn, John


Heseltine, Rt Hon Michael
Page, Rt Hon Sir G. (Crosby)


Hicks, Robert
Page, Richard (SW Herts)


Hill, James
Parkinson, Cecil


Hogg, Hon Douglas (Gr'th'm)
Parris, Matthew


Holland, Philip (Carlton)
Patten, Christopher (Bath)


Hooson, Tom
Pawsey, James


Hordern, Peter
Percival, Sir Ian


Howe, Rt Hon Sir Geoffrey
Pink, R. Bonner


Howell, Rt Hon D. (G'ldf'd)
Pollock, Alexander


Howell, Ralph (N Norfolk)
Porter, Barry


Hunt, David (Wirral)
Prentice, Rt Hon Reg


Irving, Charles (Cheltenham)
Price, Sir David (Eastleigh)


Jenkin, Rt Hon Patrick
Prior, Rt Hon James


Jessel, Toby
Proctor, K. Harvey


Jopling, Rt Hon Michael
Pym, Rt Hon Francis


Joseph, Rt Hon Sir Keith
Raison, Timothy


Kaberry, Sir Donald
Rathbone, Tim


Kellett-Bowman, Mrs Elaine
Rees, Peter (Dover and Deal)


Kershaw, Anthony
Rees-Davies, W. R.


Kimball, Marcus
Renton, Tim


King, Rt Hon Tom
Rhodes James, Robert


Knight, Mrs Jill
Rhys Williams, Sir Brandon


Knox, David
Ridley, Hon Nicholas


Lamont, Norman
Rifkind, Malcolm


Lang, Ian
Roberts, Wyn (Conway)


Langford-Holt, Sir John
Rost, Peter


Latham, Michael
Royle, Sir Anthony


Lawrence, Ivan
Sainsbury, Hon Timothy


Lawson, Rt Hon Nigel
St. John-Stevas, Rt Hon N.


Lee, John
Scott, Nicholas


Lennox-Boyd, Hon Mark
Shaw, Giles (Pudsey)






Shaw, Michael (Scarborough)
Townend, John (Bridlington)


Shelton, William (Streatham)
Townsend, Cyril D, (B'heath)


Shepherd, Colin (Hereford)
Trippier, David


Shepherd, Richard
Trotter, Neville


Shersby, Michael
van Straubenzee, W. R.


Silvester, Fred
Vaughan, Dr Gerard


Sims, Roger
Viggers, Peter


Skeet, T. H. H.
Waddington, David


Smith, Dudley
Wakeham, John


Speed, Keith
Waldegrave, Hon William


Speller, Tony
Walker, B. (Perth)


Spicer, Jim (West Dorset)
Walker-Smith, Rt Hon Sir D.


Spicer, Michael (S Worcs)
Waller, Gary


Sproat, Iain
Ward, John


Squire, Robin
Warren, Kenneth


Stainton, Keith
Watson, John


Stanbrook, Ivor
Wells, Bowen


Stanley, John
Whitelaw, Rt Hon William


Steen, Anthony
Whitney, Raymond


Stevens, Martin
Wickenden, Keith


Stewart, Ian (Hitchin)
Wiggin, Jerry


Stewart, A.(E Renfrewshire)
Wilkinson, John


Stokes, John
Williams, D.(Montgomery)


Stradling Thomas, J.
Winterton, Nicholas


Taylor, Robert (Croydon NW)
Wolfson, Mark


Taylor, Teddy (S'end E)
Young, Sir George (Acton)


Tebbit, Norman
Younger, Rt Hon George


Temple-Morris, Peter



Thomas, Rt Hon Peter
Tellers for the Noes:


Thompson, Donald
Mr. Spencer Le Marchant and Mr. Carol Mather.


Thorne, Neil (Ilford South)



Thornton, Malcolm

uestion accordingly negatived.

New Clause 8

INTERCEPTION OF MAIL

'(1) A person who—
(a) intentionally intercepts the contents of the mail carried by the Post Office;
(b) instigates any person engaged in the business of the Post Office to intercept the mail; or
(c) discloses the contents of any mail intercepted under paragraph (a) or (b) above.
unless acting in obedience to a warrant issued pursuant to the following provisions of this section, shall be guilty of an offence and liable on conviction on indictment to a fine not exceeding £5,000 or to imprisonment for a term not exceeding three years or to both.

(2) Proceedings for an offence under subsection (1) above shall not be instituted in England or Wales except by or with the consent of the Attorney General, or in Northern Ireland except by or with the consent of the Attorney General for Northern Ireland.

(3) No person shall be guilty of an offence under subsection (1) above as respects any act done by him whilst engaged in the business of the Post Office.

(4) The Secretary of State may, on the application of a chief officer of police or the Commissioners of Customs and Excise, issue a warrant for the interception and disclosure of the mail if he is satisfied that—
(a) it would assist in the detection of a serious offence;
(b) normal methods of investigation have been tried and have failed or from the nature of things are unlikely to succeed if tried; and
(c) there is good reason to think that the interception would result in a conviction for that offence.

In this subsection "serious offence" means—
(i) an offence for which a person not previously convicted could reasonably be expected to be sentenced to imprisonment for a term of three years; or
(ii) an offence in which either a large number of people is involved or there is good reason to apprehend the use of violence.

(5) The Secretary of State may, on the application of a chief officer of police or the Director-General of the Security Service issue a warrant for the interception and disclosure of the mail if he is satisfied that—

(a) it would assist in the detection of a major terrorist or espionage activity giving rise to external or internal danger to the defence of the Realm;
and
(b) normal methods of investigation have been tried and have failed or from the nature of things are unlikely to succeed if tried.

(6) An application for a warrant under this section shall be made in writing and shall specify—
(a) the person whose mail it is sought to intercept; and
(b) the facts and circumstances in support of the application;
but the Secretary of State may allow any information required under paragraph (b) above to be provided orally and not in writing in respect of an application for a warrant under subsection (5) above.

(7) Except in a case of emergency, any warrant under this section shall be issued only under the hand of the Secretary of State; and, in any such case, shall be confirmed under his hand as soon as reasonably practicable after issue.

(8) In this section 'intercept' includes the doing of any act designed to enable an interception to take place, and 'intercepts', 'intercepted' and 'interception' shall be construed accordingly.".—[Mr. Mikardo.]

Brought up, and read the First time.

Mr. Mikardo: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this we may discuss the following: Amendment No. 54, in page 39, line 36, leave out clause 47 and insert—

'47. (1) A person who—
(a) intentionally intercepts any message or other matter carried by means of a public telecommunication system (including any such system provided, under a licence, otherwise than by the Corporation);
(b) instigates any person engaged in the business of the Corporation to intercept such a message or other matter; or
(c) discloses the contents of any message or other matter intercepted under paragraph (a) or (b) above,
unless acting in obedience to a warrant issued pursuant to the following provisions of this section, shall be guilty of an offence and liable on conviction on indictment to a fine not exceeding £5,000 or to imprisonment for a term not exceeding three years or to both.

(2) Proceedings for an offence under subsection (1) above shall not be instituted in England or Wales except by or with the consent of the Attorney General, or in Northern Ireland except by or with the consent of the Attorney General for Northern Ireland.

(3) No person shall be guilty of an offence under subsection (1) above as respects any act done by him whilst engaged in the business of the Corporation.

(4) The Secretary of State may, on the application of a chief officer of police or the Commissioners of Customs and Excise, issue a warrant for the interception and disclosure of telecommunications if he is satisfied that—
(a) it would assist in the detection of a serious offence;
(b) normal methods of investigation have been tried and have failed or from the nature of things are unlikely to succeed if tried; and
(c) there is good reason to think that the interception would result in a conviction for that offence.

In this subsection "serious offence" means—
(i) an offence for which a person not previously convicted could reasonably be expected to be sentenced to imprisonment for a term of three years; or
(ii) an offence in which either a large number of people is involved or there is good reason to apprehend the use of violence.

(5) The Secretary of State may, on the application of a chief officer of police or the Director-General of the Security Service issue a warrant for the interception and disclosures of telecommunications if he is satisfied that—
(a) it would assist in the detection of a major subversive,


terrorist or espionage activity giving rise to external or internal danger to the Defence of the Realm; and
(b) normal methods of investigation have been tried and have failed or from the nature of things are unlikely to succeed if tried.

(6) An application for a warrant under this section shall be made in writing and shall specify—
(a) the person whose telecommunications it is sought to intercept and the telecommunications in question; and
(b) the facts and circumstances in support of the application; but the Secretary of State may allow any information required under paragraph (b) above to be provided orally and not in writing in respect of an application for a warrant under subsection (5) above.

(7) Except in a case of emergency, any warrant under this section shall be issued only under the hand of the Secretary of State; and in any such case, shall be confirmed under his hand as soon as reasonably practicable after issue.

(8) In this section "intercept" includes the doing of any act designed to enable an interception to take place, and "intercepts", "intercepted" and "interception" shall be construed accordingly.'

Amendment (a) to the proposed amendment, in line 34, leave out 'subversive'.

Amendment (b) to the proposed amendment, in line 51, at end add—
subversive activity" means activity whose objective is the overthrow by force of the government of the Realm'.

Government amendment No. 53.

The Secretary of State for the Home Department (Mr. William Whitelaw): On a point of order. Mr. Deputy Speaker. May I be assured that when we reach amendments Nos. 54 and 53 there will be the right to vote on both?

Mr. Deputy Speaker: I give the Home Secretary that assurance.

Mr. Mikardo: I begin, Mr. Deputy Speaker, by expressing, through you, my gratitude to Mr. Speaker for his kindness in reconsidering his provisional decision not to include new clause 8 in his selection.
For the benefit of hon. Members who were not on the Committee and who have not had time closely to follow its proceedings, I shall explain a technical point. The two main matters of the interception of mail and telephone tapping are to be discussed in reverse order to the way that we dealt with them in Committee. We dealt with them the other way in Committee because that is their order in the Bill. Part I deals with telecommunications and part II with the postal services.
In our discussions on part I, a new clause on telephone tapping was moved. In the debate on that clause hon. Members of all three parties expressed support for the principle, but not inconsiderable reservations about the working of it. Nevertheless, to provide the opportunity for the House to discuss the matter further, perhaps on the basis of a better set of words, the motion to give the new clause a Second Reading was carried and so was the motion that the clause be added to the Bill.
Later, when we discussed part II, a clause identical in wording to the one relating to telephone tapping—which now appears as clause 47—was moved in respect of mail interception. I explained earlier, when putting a point of order to Mr. Speaker, that the motion to read the clause a Second time was carried, but that the motion to add it to the Bill was defeated by one vote.
Although the two proposals were identical in wording—with the exception of one word, to which I shall come in a moment—and are also identical in their revised

forms, they were treated differently by the Committee. Whereas we can deal with telephone tapping by way of amendment No. 44, we have to deal with mail interception by way of a new clause. Normally, new clauses come before amendments. We are reversing the procedure in order to deal first with mail interception.
The clause on mail interception was moved in Committee by my hon. Friend the Member for Ipswich (Mr. Weetch). I hope that I shall not cause him embarrassment if I say with complete sincerity that his speech was one of the most remarkable and powerful that I have heard during my 30 years in the House. I hope, Mr. Deputy Speaker, that he will catch your eye later, as he has done so much work in this sphere and is so knowledgeable. I propose to deal only briefly with mail interception.
Mail interception arouses much less public interest than does telephone tapping, because far fewer people know that it goes on. Very few people know the extent of it. Many more of our people have their mail intercepted than have their telephones tapped. Unless one is in the security services there is no way of knowing the precise figures for either. We know that about 463 warrants for telephone tapping were issued, although, as I shall seek to show, the number of telephone interceptions was much greater. The figure for mail interceptions is enormous.
Half a dozen agencies have the right to demand the interception of mail. They are called—my hon. Friend may correct me if have the wrong technical term—requesting agencies. They can request the main Post Office at St. Martins-le-Grand to have mail that is addressed to any given address intercepted and copied and the copies sent to them. The extraction of letters from envelopes by some sort of spinning knitting needle, without its being apparent, was described in detail by my hon. Friend in Committee. There are also devices, such as rays and carbon lights, that show through envelopes and record letters. No doubt my hon. Friend will tell us about that. In the sub-ground floor of St. Martins-le-Grand there is a fleet of motor cycle messengers. When a letter arrives at the sorting office addressed to one of the listed addresses, it is sent to be photocopied and returned to the sorting office to be delivered at the normal time with the rest of the mail.
It is real James Bond stuff—spy fiction—but it happens every morning of the week. The figures for a recent year show that in London mail sent to 400 addresses was continually intercepted, and mail sent to a large number of other addresses was intercepted on a temporary basis—for example, offices of trade unions whose members were on strike or of an organisation that might be arranging a demonstration. I have no reason to believe that the figures have decreased. If we multiply by six or seven to equate London to the country as a whole, we see that a large amount of mail is regularly spied on and passed to the security services.
In the borough of Tower Hamlets, part of which I represent, is the Freedom bookshop, a political bookshop. The word "freedom" is anathema to our security services. To them freedom and peace equal subversion. The CIA uses the pejorative terms "peaceniks" and "freedomniks" to indicate that there is something wrong with such people. The Freedom bookshop is not a very good bookshop. It does not have much money, and a good bookshop needs


a large stock, but all its stock is on the counters and shelves. It is not like a "porno" bookshop, with most of the stock in the back room.

Mr. Lawrence: How does the hon. Gentleman know?

Mr. Mikardo: I have listened to debates in the House. As far as I know, no "porno" bookshop has its mail intercepted. When the Freedom bookshop was opened one morning, six letters were found. Inside one was a receipt from St. Martins-le-Grand for six letters sent for security vetting, so one of the security "bods" had been a bit insecure. John le Carré would not approve of him.
Mail is being searched on a massive scale. Perhaps such things go on in Moscow, but they are not publicised. What would The Daily Telegraph or the News of the World make of goings on in the basement of the central post office in Gorky Street, with little boys on motor bikes rushing to district offices to carry letters for the KGB to post? If one of the telegraph boys had an improper liaison with the woman in charge of the central post office, imagine what our newspapers would make of that as evidence of the horrible things that ordinary people have to suffer in a police State—but it goes on here.
As with the issue that I dealt with in the debate on the previous clause, this issue is also affected by the breaking of the postal monopoly. Once the Government get under way, some mail will be delivered by the Post Office and some by private companies. Anyone engaged in phoney business will now know what to do. If he does not want his letters to fall into the hands of MI5, 6, 7, 8, 9 or 10, he must not use the Post Office, because they will go through St. Martins-le-Grand and be collected by the little boys on their motor bikes. If he sticks to a private company that is trenching into the Post Office monopoly, he will be all right.
When the Secretary of State gives a press conference at the time of Third Reading—he likes giving press conferences—he should issue a notice to all spies, industrial espionage merchants, tax and VAT fiddlers and illegal currency dealers that they are safe if they send their correspondence through private mail deliverers. They should avoid the Post Office if they do not want their mail copied. I make the point facetiously, but it is valid. When the Government are creating two systems of mail delivery, how can they justify interception and surveillance of only one? When the Home Secretary enlightens us later I hope that he will address his mind to that question.
Undoubtedly the right hon. Gentleman will tell us that he, too, does not like the system, as it interferes with individual liberty, but that it is necessary to secure the defence of the realm. No hon. Member is in favour of subversion, but what about the prejudice of the defence of the realm through communications carried through private postal services? It is a penalty to have one's letters read. Why penalise only those who send their mail through the Post Office? Private firms could advertise in The New Standard: "Send your mail through us and not through the Post Office. It will be safe from the prying eyes of the Home Secretary."
I dwell only briefly on mail interception, as others, most notably my hon. Friend the Member for Ipswich, are more knowledgeable than I am, and I hope will give the House the benefit of their knowledge.
I turn to amendments Nos. 54 and 53—the latter being the amendment of the Secretary of State for Industry—which deal with clause 47 and telephone tapping. There is an apparent paradox. I suppose that one could reasonably ask why hon. Members like myself, who are most concerned about interference with the liberty of the individual, want to put provisions for telephone tapping into statute. There is no statutory authority for intercepting telephone messages or for eavesdropping on telephone messages. We want the provisions in the statute so that the practice can be defined and limited. So long as it is not defined and not limited, goodness knows how many different agencies engage in telephone tapping, whether or not it is authorised by the Home Secretary, and goodness knows what sort of criteria, or lack of criteria, are or are not applied in deciding whose telephone shall be tapped, for how long, and for what purpose. I should prefer that we had none of it. If it is to exist, it should be in the statute so that hon. Members can attempt—we do not do so well at this as do other free countries—to call the responsible Minister to account.
6 pm
I suppose that the definitive dictum on this question was given by Sir Robert Megarry, who tried the case of Malone v Commissioner of Police. He delivered a long reserved judgment which all those interested in this problem of securing the safety of the State while not trenching more than necessary on the liberty of the individual will find worth reading. I am not being selective. The heart and thrust of Sir Robert Megarry's point was that the practice of telephone tapping is not one
in which it is possible to feel any pride in English law
and that the system of telephone tapping is so open to political abuse that it is "abundantly clear" that British practice will be found unacceptable to the European Court of Human Rights.
The Malone case is even now before the European Court of Human Rights. It will not look very good, I suggest, if that court comes up with a judgment, as it may in the light of Sir Robert's announcement, that our practices in respect of the interception of telecommunications are at variance with human rights.
We have a duty to protect the realm, and that applies to every Government of every country. I do not disguise that. I agree with everyone on that score. Other countries, however, achieve that aim with laws that are much better than ours. West Germany has a good deal more terrorist subversive activity than does Britain, apart from Northern Ireland. People in West Germany who have had their telephones tapped are notified when the tap is taken off, and they have the right to sue the Government if they can establish that the reason for the tapping was invalid and that the the tapping was unjustified. West Germany is not the most rabid, Red and revolutionary State in Europe—not by a long chalk. It is, however, a country where, following the horrible experiences of half a century ago, people are jealous of the rights and liberties of the citizen.
In the United States there is a good deal of eavesdropping on, and tapping of, telecommunications. It is authorised by a Minister, as in Britain. The difference is that there is good reason to believe that much less unauthorised tapping occurs in the United States than in Britain. In any event, the Minister who authorises it can be called to account in Congress. He has to give a report of what he has authorised. He can be called before a House


Committee and before a Senate Commitee. In this House, hon. Members cannot ask a single question of the Home Secretary about his work in this respect. The United States has much more open government in this regard. It is much more tender of the rights of the citizen amd much more willing to make the Administration accountable to the legislature for any action taken in breach of the rights of the citizen.
I invite the Home Secretary to explain why he thinks that he cannot give the same rights to people here as are provided in West Germany and why he cannot hold himself accountable to the House in the way that his opposite number in the United States holds himself accountable to Congress. Those are simple requests and I should have thought them susceptible of a straightforward answer. I hope that the right hon. Gentleman will be kind enough to bend his mind to them.
Account has to be taken of the volume of tapping that occurs. When one trenches on the rights of individuals, a difference in degree, if it becomes big enough, amounts to a difference in kind. The new clause makes provision for telephone tapping in cases of espionage, terrorism and serious crime. That is right. There is, however, a difference between a bit of tapping done for that purpose, which all hon. Members would support—there would be no dissidents among us—and the amount that actually occurs.
The number of taps has trebled in the last 20 years. I do not believe that the number of people seeking to overthrow the State by force has trebled in the last 20 years. Nor do I believe that the number of people engaged in espionage, counter-espionage or industrial espionage has trebled in the last 20 years. Will the Home Secretary give his explanation for this large increase? I happen to know the budget for this year for the telephone tapping installation organisation. It is £1,370,000. That goes almost entirely on salaries.
One can take a "flyer" about the salary that each telephone tapper receives. My hon. Friend the Member for Blaydon (Mr. McWilliam) will be able to help the House because, although he has never tapped telephones, he has worked in telecommunications and knows the rates of pay. It looks, however, as though between 100 and 150 people—certainly more than 100—are engaged in this activity. Those are not the chaps who listen to the conversations or turn on the recorders. That is all done by MI5. I am talking only about those who put the plug in and do the hook-up. There seem to be, on that budget figure of £1,370,000, rather more than 100 of them.
We are told that telephone tapping takes place only when the Home Secretary has issued a warrant. The last figure that we have for the number of warrants issued in a year is 463. Are we to believe that between 100 and 150 chaps are doing 463 taps in a year, four each in a year, putting in a plug and then taking it out four times a year? I should like to know how long a lunch hour those blokes take, how many weeks' holiday they have in a year, and how many spy novels they manage to read. How bored they must be, waiting for the one time in every three months when the signal comes "Joe, stick one in there"! Then Joe has to wait for another three months.
Is it not clear that as 100-odd people are not employed to do 463 taps a year there are a heck of a lot more taps being done than 463? Does not that bear out the evidence

that already exists from many sources that there is a good deal of tapping going on that the Home Secretary does not even know about?
When we debated the matter in Committee, the Minister relied heavily on the White Paper. The fact is that the White Paper is not complete; it does not tell the whole story. It does not cover all the agencies involved in telephone tapping. It does not cover the activities of the Foreign and Commonwealth Office, of the Ministry of Defence or of the Government's communication headquarters. Moreover, it does not cover the considerable activities in this country of the National Security Agency of the United States.
I do not know whether our MI5 does telephone tapping in the United States, but the Americans' lot do plenty in this country. We have employees of a foreign Government making telephone taps of the international conversations of British citizens. They do not tap any of us when we are talking to our constituents, but if we make a call that goes on a transatlantic cable we can be tapped by the National Securities Agency, and we often are.
So much for the general point. I now come to the particular point represented by my amendments (a) and (b) to amendment No. 54, dealing with the question of subversion. The only respect in which my new clause 8 differs from amendment No. 54, which is to replace clause 47—a new clause introduced in Standing Committee—is that my new clause does not include the word "subversive". My amendment (a) is to delete "subversive" from amendment No. 54, leaving espionage, terrorism, and so on.
Amendment (b) is a fullback position, to ensure that if amendment (a) is defeated and "subversive" remains in amendment No. 54 we have a definition of what we mean by the word. I shall not go to the stake arguing that the definition that I have written into amendment (b) is the best possible. I am sure that others could write a better definition, and if they wish to do so in another place I shall be happy. I should prefer the word not to be in the Bill, but if it is, it should be defined. If it is not, anyone who engages in a telephone tap on the grounds of subversion defines "subversion" to mean what he wants it to mean. In the absence of any definition, it can be an absolutely subjective judgment by any individual.
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Many people in the security services take the view that anything that is in opposition to the policies of the Government of the day is ipso facto subversive. That is the great danger. The right to oppose the policies of the Government of the day, whichever party is in Government—I have more than once opposed the Government's policies, whichever party was in Government—is an essential thread in the warp and weft of our democratic system. Anyone who takes away that right will strike at democracy as hard as do the totalitarians in a police State. If a person is held to be subversive ipso facto—because he disagrees with, and perhaps wants to organise against, the policies of the Government of the day—that tears away a lump of our democracy.
How else did it come about that the telephone of the Campaign for Nuclear Disarmament was tapped? Was it really thought that Canon John Collins would blow up St. Paul's Cathedral, and that Lord Russell would seek to


overthrow the State by force? It was tapped because the CND policy was contrary to the policy of the Government. Ipso facto, that is subversive.
Why do trade union offices have their telephones tapped? The trade unions are not seeking to overthrow the Government by force. They are not engaged in espionage, industrial espionage or counter-espionage. They are not wealthy men who go to the Cayman Islands in order to avoid their tax liabilities. The only ground on which their telephones are tapped is that they are held to be subversive, on the subjective judgment of an individual who thinks that, ipso facto, trade unions are subversive.

Mr. Gorst: The hon. Gentleman will remember that when we dealt with the question of definition in Standing Committee I suggested a definition that was far wider than the one in his amendment (b) to amendment No. 54. I said that
the definition of 'subversion' is to overthrow or overturn, to destroy by weakening the trust confidence or belief in the State by unconstitutional if not illegal means."—[Official Report, Standing Committee  B, February 1981; c. 389.]
The hon. Gentleman said, as reported at c. 391 of the Official Report of our Committee proceedings, that he entirely accepted my definition. Will he explain why he has now narrowed the definition so much?

Mr. Mikardo: I shall do so gladly. I had not forgotten that. When the hon. Gentleman said what he did in Committee, I said—and I meant it—that I was very grateful to him for his intervention. I pondered very carefully when I was planning to table the amendment whether I should not pinch his words, but I thought that that would be a bit too much like a ploy, or trickery, in order to secure his sympathy and help and perhaps that of other Conservative Members. Therefore, all that I did was to precis the hon. Gentleman's definition. I think that what I have said is what the hon. Gentleman said, although of course not so complete, because it is said in many fewer words.
I shall answer the hon. Gentleman's point by saying that if he had tabled an amendment (c) in the terms that he just quoted I should gladly have withdrawn amendment (b). All I want is a definition, and a good definition. That is why I said earlier that I am not prepared to go to the stake to defend my words, and I defer to any right hon. or hon. Gentleman who can find better words.

Mr. John Browne: I am not a lawyer and I realise that as a layman I am treading dangerous ground, but I wish to put one point to the hon. Gentleman, many of whose comments I view with sympathy. The question is not whether a judgment is subjective as to the precise meaning of subversion but to what use the information is put that has been gathered from the tapping. It is difficult to find a definition of subversion that will cover everything. Would it not be better to restrict the use of the information gathered and leave it to the Home Secretary to use his judgment about what is subversive?

Mr. Mikardo: I understand what the hon. Member for Winchester (Mr. Browne) is saying. I thought that I had done what he asks for by not defining subversion in ipse but by defining the objects at which subversion was directed, the purposes for which the subversion was carried out. Indeed, the definition given by the hon.

Member for Hendon, North (Mr. Gorst) tends in that direction. I repeat that if any hon. Member has a better definition I shall be prepared to listen to him and to accept any formula that contains a good definition.
Perhaps the hon. Member for Winchester will be able to tell me—because I am sure that the Home Secretary cannot do so—what definition of subversion led to the tapping of the telephone of the Canadian high commissioner. Before considering what legislation to bring forward to deal with the repeal of the British North America Act, in response to the request of the Canadian Prime Minister, Her Majesty's Government wanted to know what the Canadians were thinking. The Canadian Government produced evidence to show that the British Government had information which they could have obtained only by overhearing telephone conversations at the Canadian commission.
What definition of subversion could have led to that? We all have different political views. Some people believe that any man, however slightly to the Left of the late Signor Benito Mussolini, is ipso facto a subversive.

Mr. Tristan Garel-Jones: Like the hon. Member.

Mr. Mikardo: I accept that I am a little to the Left of the late Signor Benito Mussolini. I hope that the hon. Gentleman can say the same for himself, though I doubt it.
Nearly a half century ago, I remember a plain clothes man in the East End saying to me that all members of the Labour Party were Communists, and I replied "Including Clem Attlee and George Lansbury?" and he said, "Yes; they are the worst of the lot". Such opinions are much too individual and subjective.
My chief worry is that, whereas the people in our security services—I imagine; I do not know—are expert at all the mechanics of their trade, coding and decoding, cameras hidden in cigarette lighters, bugs, microphones hidden in toecaps, all the evidence shows that politically they are a bunch of illiterates. I would not trust any of them to make a political judgment. They exercise surveillance over mail and telephones for what they believe to be political ends, yet they are a bunch of ignoramuses. They are the people who went on listing Arthur Koestler as a Communist for more than 20 years after he had become the most powerful anti-Communist propagandist in the world. They are the people who listed Lord Russell. Anyone who knew him knows that he could not have swotted a fly. Yet the security services listed him as a potential man of violence.
They are the people who tapped the telephone of the International Labour Organisation—that is a beauty—to which Her Majesty's Government, like other Governments, send delegates, as does the CBI and the TUC. Her Majesty's Government must approve of the International Labour Organisation, as do we all, so why was its telephone tapped? If its title were what it really is, "The International Organisation for Relations between Governments, Employers and Workers", it would never have had its telephone tapped. But it made the mistake of putting the word "labour" in its title, and some political illiterate in the security services told himself that "Labour" equalled "Left" equalled "Communist" equalled "subversive", and so its telephone was tapped. There was also the case of the harmless bookshop that I mentioned earlier.
These are the people who are making judgments. We now know that they were not even able to recognise subversives when the subversive was their own boss, the bloke who sat for 12 years at the next desk or in the big room upstairs. They are the people who give themselves the right to make subjective judgments about the people who, on political grounds, should have their telephones tapped or their mail intercepted.
I come back to the question of the illegal tapping—and it is illegal—that is carried out in this country by the National Security Agency of the United States of America. It has been admitted in the United States that that agency has tapped the telephones of several Members of Parliament. The Home Secretary, when challenged, denied that Members of Parliament had had their telephones tapped. I am sure that he was right, because he was talking about tapping by the British services. However, he has no control over tapping that is done by the United States National Security Agency.
Whereas in this country the security services still considered Arthur Koestler as a Communist for only 20 years after he became a violent anti-Communist, in the United States anyone who has ever been a Communist remains one till the day that he dies. I am sure that they still have Frank Chapple listed as a Communist, and my right hon. Friend the Member for Leeds, East (Mr. Healey). With the American services, everything goes on for ever, and they are tapping our telephones.
I have spoken for a long time, and I apologise to the House, but I have done so for one reason. I shall repeat something that I said in Committee. I care passionately about the reputation of this country as a free society. In my life I have seen too much of the other sort of totalitarianism of both Right and so-called Left ever to want even the tiniest drop of the poison that runs through those systems seeping into our own society. I want to defend us, with every breath that I have, against that, but I believe that it is happening and that we are beginning—I do not want to overstate the case—to have some of the characteristics of a police State. We must watch it.
I repeat that proper surveillance in defence of the realm must go on, but it must not be used in secret or unaccountably to mask a gross invasion of the human rights and civil liberties of tens of thousands, if not hundreds of thousands of decent, innocent people.

Mr. Gorst: It is extraordinary to find myself agreeing with almost everthing said by the hon. Member for Bethnal Green and Bow (Mr. Mikardo). I may part company with him on the detail, but I agree completely with the broad sweep of his comments. I also agree that, on the amendments and the new clause, we are discussing two aspects of the same topic, because telephone tapping and the interception of mail are part and parcel of the same subject.
I agree with the hon. Member in another respect. When the matter was discussed in Committee and I supported the inclusion of what is now clause 47 I made it clear that I did so because I believed that the proper place to discuss a matter of such enormous importance as telephone tapping, with all its implications for the freedom of the individual, was not in a Committee of 16 Members but on the Floor of the House. In my view, the decision should be made here.
I am doubly convinced that my view was correct because in Committee, apart from the fact that the Labour and Liberal Parties take that view, I took a lone view on the Government side, and views expressed by my hon. Friends in an early-day motion—which has had a chequered career since it was tabled—have reinforced my opinion. At one stage, 13 per cent. of my hon. Friends also took that view. I believe that this is the right place for the matter to be discussed and decided.
The purposes of clauses 47, which is to be amended along the lines that I said would be essential if it were to continue to have my support, are fourfold. I take no exception to telephone tapping in the national interests—to defend the security of the State, or to find major criminals or fraudulent people—but it must be done under a warrant from the Home Secretary, which, he would say, happens at present. If it is not done under his warrant and is illegal it ought to be punishable.
At the moment, the operation is on the basis of guidelines enshrined in a White Paper produced by the Home Secretary. The terms of clause 47, as amended, will be on all fours with the terms of that White Paper. If the clause is not on all fours with the White Paper I shall have no objection to its being amended to make sure that it is, because I have no desire to tie the hands of the Home Secretary or the security services. Therefore, the first purpose of clause 47 is to ensure that guidelines are replaced by statutory provisions.
Secondly, it is necessary to deter and to penalise anyone who illegally taps a telephone. It is true that to interfere with telephone apparatus is already an offence under regulations made under the Post Office Act. The best information that I have been able to obtain is that, the offence is that of stealing the Post Office's electricity, for which one can be fined £5 or £10. That is not an appropriate penalty for interference with someone's privacy.
The onus is on the Post Office to take action. That is wrong. It must be entirely wrong for any agency of Government or, as the Post Office is, a body that is rather less than an agency of Government, to be the protector of the privacy of individuals. Because of the necessity for secrecy and security, I do not believe that the victim of a telephone tap is the appropriate person to take action. Indeed, it might be argued that he is already in a position to take action through the courts, but, as far as I know, no one has ever done so.
The appropriate authority is the person in our system who is responsible for law and order—the Home Secretary acting alone—or, through other procedures, with the consent of the Attorney-General. That is what clause 47 seeks to provide. I do not believe that suspicion of guilt entitles the authorities to ransack a person's house or violate his privacy without his knowledge and with impunity.
The third purpose of clause 47 is to reassure people that their private telephone conversations are secure from eavesdroppers and snoopers. Rightly or wrongly, there is a feeling among many people in my constituency and elsewhere that their telephones may be tapped. They would be reassured if they felt that anyone illegally tapping telephones would be subject to the severest possible penalties.
Finally, I believe that responsibility for initiating prosecutions must rest with the Attorney-General, or that


such action must have his consent. It is not a matter where I wish to see private individuals taking the law into their own hands.
Clause 47 does not seek to tie the Home Secretary's hands or to diminish his freedom of action against criminals, frauds, terrorists, spies or anyone who is trying to subvert the safety of the State. It does not seek to remove secrecy from security operations or criminal investigation and it does not give anyone the right to discover through the courts whether tapping is being carried out.
It is argued that for reasons of administrative convenience it is desirable that this matter be subject to statutory provisions. However, although what is administratively convenient may be desirable, it should not, and must not, be at the expense of the rights of the innocent individual. On the question of finding the appropriate balance between the privacy of individuals and the security requirements of the State, I prefer that the final arbiter of the issues of principle that are involved should be Parliament rather than a faceless civil servant behind closed doors, typified by Sir Humphrey of "Yes Minister", manipulating behind the scenes. It is here in the House of Commons that we should decide the principles involved. But that does not mean that we should enshrine in legislation a reporting-back procedure.
It was for that reason that I recommended in Committee that the revisions to the new clause should eliminate four subsections which require notification of tapping, the right to apply for information, review by three independent people, and reporting to Parliament. By definition, in clause 47, it is only major criminals and subverters or spies acting against the interests of the State with whom we are dealing, and it is totally inappropriate, therefore, that the House should receive and debate reports on that subject.
The other imperfections of the clause will be removed by the amendment. They are twofold. First, the word "subversion" has been brought back, and I am happy to accept the reassurances given by the hon. Member for Bethnal Green and Bow on that. Secondly, serious offences are so defined as to include offences involving large numbers of people and the apprehension of any violence that might take place. There is a change to ensure that no Post Office employee in the course of his duty inadvertently commits an offence while carrying out his work.
I have heard certain arguments against statutory provisions as opposed to guidelines. It has been suggested that the system of guidelines worked perfectly well and that statutory provisions are not necessary. It is clear from what has been written in the newspapers and said in the House that there is so much disquiet that that can no longer be accepted.
It has been suggested that Lord Diplock's recently published report should have allayed any fears. Quite the contrary. Lord Diplock addressed himself to the procedures which take place when the Home Secretary has granted a warrant. He did not—and was not, I understand, required to—examine what might be happening without a Home Secretary's warrant. To that extent I regard his report as being irrelevant.
It may be argued that if illegal telephone tapping or interception of mail takes place a warning will be enough. All I can say is that we have no evidence that that has ever

been discovered and, therefore, we have no evidence whether a warning would be effective. If any cases of illegal telephone tapping or interception of mail have been discovered, I hope the Home Secretary will tell us how often they have been discovered and what action, if any, has been taken to ensure that they do not recur.
There is then the argument that secrecy will be blown by conceding a right of individuals to challenge these procedures in the courts. I have tried to show that I believe that this right already exists, but even if it does not exist, if it were created—which is open to serious argument—I should like to know precisely on what basis it is maintained by the Home Secretary or the Government that the House cannot enact in this clause a specific provision to ensure that such secrecy cannot be exploded. Lastly, there is the question of telephone regulations, which I have already mentioned.
In conclusion, I ask the Home Secretary, if he does not accept clause 47 as amended, to give an undertaking that if people are discovered to be illegally tapping telephones, infinitely stiffer penalties will be exacted against them, particularly if they are in the public service. It seems to me that the threat to the individual is infinitely greater if an over-zealous policeman or an over-zealous Customs and Excise official goes beyond his powers because he does not go to the Home Secretary for a warrant, perhaps feeling that were he to do so the Home Secretary would not think it justifiable to grant it. I ask the Home Secretary to give an assurance that the penalty for the offence will be more meaningful than a £5 or £10 fine.
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Vigilance is necessary in the protection of freedom, but petty surveillance, surreptitious, bureaucratic fishing exercises and speculative official eavesdropping are not features of a free society. They belong to a totalitarian society, or one which, if it is not a totalitarian society but permits such practices, is a soulless community with no respect for the dignity and privacy of individuals. I do not believe that many of us in the House would wish to support such a society.

Mr. Whitelaw: When the clause was debated in Committee, I undertook, through my hon. Friend the Minister of State, to argue the case myself on Report. It is, of course, my duty to do so because it is acutely my responsibility, and my responsibility alone. That is why it is so important that I should put my case to the House.
My purpose this afternoon is to persuade the House that new clause 8 on the interception of mail and the old clause 47 on the interception of telephone messages which was inserted in the Bill in Committee should be deleted and that the new clause proposed by the hon. Member for Newcastle-under-Lyme (Mr. Golding) and supported by my hon. Friend the Member for Hendon, North (Mr. Gorst) and the hon. Members for Blaydon (Mr. McWilliam) and Liverpool, Edge Hill (Mr. Alton) should not be put in its place.
These clauses are concerned with the integrity of the public telephone and the public mail services, which are of great importance to us all. They affect not only the minority who are involved in crime but the great majority who are not. They, too, have an interest in interception, both because they want criminals brought to book and because they want to be assured that their telephones will not be subject to arbitrary interception.
The postal and telephone services provide a universal means of communication for the whole nation, and the telephone system in particular provides the most convenient and quickest possible means of communication. It also provides the ideal means of communication for the criminal or the spy who wishes to contact his associates.
I do not think that it can be disputed that it is as necessary today as ever it was for the agents of the Crown to exercise a proper but strictly controlled surveillance in relation to those services. As the Birkett report put it in 1957:
the criminal and the wrongdoer should not be allowed to use services provided by the State for wrongful purposes quite unimpeded".
Since then, the growth of terrorism and drug smuggling have served only to strengthen the case. On this, there is no disagreement between the Government and the supporters of the clauses. They too, as the hon. Member for Bethnal Green and Bow (Mr. Mikardo) and my hon. Friend the Member for Hendon, North made abundantly clear, accept that interception is a weapon that should be available to the Crown.
What is at issue is not the need for interception as a weapon in the fight against crime but the way in which the weapon is controlled to ensure that the power to intercept communications is exercised only in clearly justifiable cases and the use made of it is limited to what is strictly necessary. A balance has to be struck between the needs of the community in the prevention and detection of crime and the rights of the individual whose privacy may be infringed.
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The question that we must debate today is whether, for that balance to be properly struck, the arrangements for the control of interception must be enshrined in legislation. My case rests on two simple but vitally important propositions. The first is that if interception is to be effective it must be carried out in secret. The second is that the judicial process is, by its nature, an open process. The conflict between those two propositions makes it impossible for interception to be regulated by an Act of Parliament and thus made subject to litigation, without destroying its effectiveness.
Clearly, a suspected bank robber, drug smuggler or spy should not know that his mail or telephone is being intercepted at the time. If he does, he will modify his behaviour accordingly. It is equally important that the information which forms the case for interception should be kept secret, both then and subsequently. Clearly, the criminal would be helped if he discovered how much the police knew about his activities and who was telling them. Yet that is exactly what would happen if the criteria for interception were laid down in an Act of Parliament; for it is an essential feature of our constitutional system that what is laid down in an Act of Parliament can be tested and enforced in the courts at the suit of any interested person.

Mr. Christopher Price: Many of us accept that but believe that the Attorney-General's fiat, in that he can take into account public policy, coupled with the fact that courts can, when necessary, sit in camera, could take account of the fundamental objection which the Home Secretary makes.

Mr. Whitelaw: I am grateful to the hon. Gentleman for accepting my argument. If the way in which the Home

Secretary may issue warrants were laid down in an Act of Parliament, private individuals would have the right to sue the Home Secretary in a civil suit in the courts. That is the legal advice that I have received and it is the basis on which I rest my case.
If it could be said that that could be evaded, either by the use of Crown privilege or by courts sitting in camera, it would not be long before there was grave dissatisfaction. Many hon. Members have already said that that would be unsatisfactory.
Cases in which an individual thought that his telephone was being improperly intercepted could be brought before the courts and the courts would be obliged to adjudicate. To enable the court to determine the matter fairly, all the relevant information would have to be exposed in evidence. That would include all the information available to me. Some of it would be of a most sensitive nature, derived from people on whom the police and the security services depend; people, in some cases, whose lives would be endangered if their part were known or even suspected by the dangerous men against whom interception is sometimes employed.
Before I sign a warrant—and that is a responsibility that I cannot delegate—I have to be satisfied that interception is justified in accordance with the criteria set out in the White Paper which the Government published a year ago. I emphasise that. That is abundantly clear. It is a responsibility placed on me as the Home Secretary by the House and the country. It is important to make that abundantly clear.
That means that I must be fully and frankly informed of the basis of suspicion against the individual involved, including any information which on no account should be revealed, least of all to that individual. If I am to be frankly informed about such secret matters I must be in a position to keep the secrets entrusted to me.
How, then, could I permit such information—which I would not reveal to the House—to become evidence in a court of law? Yet, if interception were regulated by statute, that is what must happen. The essence of the judicial process is that the judge must determine a matter exclusively on the basis of the law and the evidence adduced by the parties, publicly and in the presence of each other.

Mr. Gorst: Can my right hon. Friend confirm that it is already illegal to interfere with a telephone by tapping without his warrant? If that is so, is not it already open to people to take the legal proceedings against which he is trying to defend himself?

Mr. Whitelaw: I am coming to my hon. Friend's first point. I shall point out where that is an offence, particularly for Post Office employees. I am saying that if the procedure for a warrant, as proposed, were laid clown in an Act, that of itself would lay me open to the civil suits which I have described. It would no longer be possible to keep secret the type of sensitive information, often given at great personal risk, to which I have referred. It is no answer to say that secret matters could be kept secret by claims of Crown privilege.
If secrecy precludes me from saying whether there has been an interception or, if there has, from demonstrating to the court that the conditions laid down in the statute for the issue of a warrant were met in a particular case, the judgment of the court must go against me. From that there is no escape.
Important safeguards already exist which avoid the unacceptable consequences of legislation. The Government have appointed one of our most respected judges, Lord Diplock, to scrutinise the existing arrangements and to undertake a continuing, independent check to ensure that the procedures and safeguards set out in the White Paper on 1 April 1980 are being observed.
I hope that whatever criticisms hon. Members may decide to make against the Government or the system they will not make unworthy accusations against Lord Diplock, who was asked by the Government to undertake a task and who is carrying it out scrupulously in every way. He has found that the procedures are being strictly observed. He had complete access to all the secret material submitted to me. That was questioned by an hon. Member earlier. He has complete freedom to look at any case in whatever way he chooses. Individual cases are thus independently tested against the published criteria while preserving the essential secrecy.
The public are protected against unjustified interception and the informant against the revenge of his associates. No one who has read Lord Diplock's first report can doubt the care with which he carried out his task. He gave the system a clean bill of health and his continuing checks on individual cases provide a valuable new safeguard against any departure from the published principles.
Then there is the position of the Post Office and, after the coming into force of this Bill, the British Telecommunications Corporation, which is independent of the Government. They need the confidence of their customers and would not put it at risk by allowing widespread and unjustified snooping on those customers' communications. In fact, they will undertake interception only where the law requires them to do so and their employees would be committing a criminal offence if they undertook interception except in accordance with a warrant.
Similarly, as regards the police, it was plainly stated on oath in a recent court case that
The Commissioner of Police of the Metropolis would not in any circumstances authorwise, or be party to, the tapping of any telephone otherwise than in pursuance of a Warrant of the Secretary of State.
The same applies to other chief officers of police, and for an individual police officer to undertake unauthorised interception—I say this in answer to my hon. Friend the Member for Hendon, North—would be a very serious disciplinary offence. These arrangements provide a strong safeguard against unauthorised tampering with Post Office equipment. If Post Office employees engage in unauthorised interception they are breaking the law. While I know that generalised allegations of unauthorised tapping have been made, I have seen no evidence of it and I have not been given evidence of it. I can assure the House that if I were given specific evidence about unauthorised interception I would immediately take firm steps to deal with it. That is the answer to what my hon. Friend said about those who undertake it being punished.
It is sometimes argued that to introduce legislation into this area would not be all that damaging because a number of other countries have done it. The hon. Member for Bethnal Green and Bow asked me to reply to this point. This is, I believe, a misleading argument, which does not

pay sufficient regard to the different legal, constitutional and historic traditions of the countries concerned, which make it inappropriate to draw a parallel.
In the Federal Republic of Germany, for example, which is often quoted in this connection, there is a statutory provision which provides in terms that
there shall be no legal remedy before the courts in respect of the ordering and implementation of restrictive practices",
which in this context means surveillance measures. In exceptional cases the constitutional court would have a function, but of course in this country we have no constitution in the German sense and no constitutional court. If we were to follow the German model we should find ourselves with a statutory provision which was not within the cognisance of the courts of the land—those very courts whose constitutional function it is to interpret and enforce the statutes in individual cases. I cannot believe that the House would wish to adopt so extraordinary a provision.
In a number of countries the practice is for interception warrants in criminal cases to be issued by a magistrate or some other judicial officer, acting in an administrative rather than a judicial capacity. In this country, that would mean giving the responsibility to all magistrates, or all judges, or at least some class of judges, with a consequent loss of consistency of control and—which I believe in the end would be much disliked by the House—any democratic responsibility at all. I believe that it is far better that this responsibility should rest with a single Minister responsible to the House.
Moreover, from the information available to me I have formed the view that in those countries which provide for the regulation of interception by statute, usually including provisions such as retrospective notification, the effectiveness and value of interception has been reduced. I cannot believe that it would be wise for us to follow their example.
Let me now sum up the Government's case against these provisions. It is that, interception to be effective, must be secret. That, in turn, means keeping secret both the fact of interception and the information which led to it. If arrangements for interception were laid down by Act of Parliament it would be impossible under our judicial system to preserve that secrecy and yet, if challenged, to satisfy the court that the Act had been complied with. Secrecy and litigation cannot be reconciled. That is why we oppose these provisions. They are, in our judgment, unworkable. In our view they are also unnecessary.
The public have a right to know that interception is properly controlled. But I believe that the present system of administrative controls and safeguards, which I have set out in the White Paper and which have stood the test of time, provide the necessary assurance. The position of the Post Office, the key role of the Secretary of State's warrant, the procedural arrangements described in last year's White Paper and, behind them all, the monitoring of Lord Diplock are, I believe, sufficient to reassure the public that our arrangements are such as both to protect the public interest and, of vital importance, of course, to safeguard the rights of the private individual.

Mr. Golding: That speech can be categorised as one of Sir Humphrey's best. We can imagine him writing the peroration "Stood the test of time" and all the rest of it. What the Home Secretary has done is to turn the argument on its head, and I will come to that in a moment.
There is enormous disquiet on this subject, and it is because of the extent of the disquiet that the Post Office Engineering Union has spent so much time on it and that "Tapping the Telephone" was issued as a document. The POEU has been very concerned that its members have become dubbed telephone-tapping snoopers and, in inquiring in to the situation, it became very worried about the legal basis of the tapping.
I disagree with my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) on the judgment that he quoted of Sir Robert Megarry. In that judgment it is made clear that telephone tapping in this country is not illegal. However, he argued at the same time that the practice of telephone tapping cries out for legislation, because the source of the authority is very vague indeed.
Schedule 3, part I, of the Bill provides:
A requirement to do what is necessary to inform designated persons holding office under the Crown concerning matters and things transmitted or in the course of transmission by means of telecommunication services provided by the Corporation may be laid on the Corporation for the like purposes and in the like manner as, immediately before the appointed day, a requirement could have been laid on the Post Office to do what was necessary to inform such persons concerning matters and things transmitted or in the course of transmission by means of such services provided by it.
That means that a Minister responsible for telecommunications can give a directive to what will become British Telecommunications to tap telephones. That is the source of the authority, and it is an unsatisfactory source. Of course, telephone tapping has to take place in secret and there is nothing in my proposal that would prevent telephone tapping from taking place or from taking place in secret.
It was necessary to move amendment No. 54 for three reasons. First, clause 47 is deficient, in that it hits employees in the performance of their duties. We have excluded them in the amendment. Already it is an offence for employees of the Post Office, under the Telegraph Acts and the Wireless Telegraphy Acts, either to tap telephones or to pass on information obtained through tapping.
Secondly, the objective of the amendment was to establish the basis on which warrants can be granted so as to reflect as closely as possible the existing non-statutory code described in Cmnd. 7873, which the Home Secretary presented to Parliament on 1 April 1980. That is why subversion is included within the amendment. It was intended to present to the right hon. Gentleman a statutory basis which was as close as possible to the principles to which he says he adheres. The objective of the amendment was to make it possible for the Government to accept a statutory position which in principle was still different from that laid down in Cmnd. 7873.
Thirdly, the amendment removes parliamentary accountability, as the hon. Member for Hendon, North (Mr. Gorst) remarked. My hon. Friend the Member for Bethnal Green and Bow talked considerably about the need for parliamentary accountability. Neither his new clause nor my amendment makes any provision for parliamentary accountability.
The amendment will ensure that those outside the business of telecommunications who intentionally intercept any message or instigate any person to intercept such a message, or disclose the contents of any message
unless acting in obedience to a warrant issued pursuant to the following provisions of this section, shall be guilty of an offence

and liable on conviction on indictment to a fine not exceeding £5,000 or to imprisonment for a term not exceeding three years or to both.
Therefore, the amendment is directed to those outside the business of telecommunications. It is directed to those who may wish to get themselves involved in telephone tapping, whether it be for business or industrial espionage, or for police, security or Customs and Excise business.
The second provision makes it clear that no proceedings shall be instituted in England or Wales
except by or with the consent of the Attorney General, or in Northern Ireland except by or with the consent of the Attorney General for Northern Ireland.
That means that secrecy will not be threatened by the clause. The proceedings that are to be taken under the amendment may take place only if the Attorneys-General have agreed to them. I assume that we can rely on the security clearings of our Attorneys-General.
Subsection (3) of the amendment provides:
No person shall be guilty of an offence under subsection (1) above as respects any act done by him whilst engaged in the business of the Corporation.
That does not give a general exemption to those who work in the corporation because, as the Home Secretary said, they are already covered under the Telegraph Acts. The subsection lays down clearly in a statutory form the principles contained in the White Paper.
I do not understand why the right hon. Gentleman resists the amendment. Presumably he is saying that it proposes that conditions should be laid down for the issue of a warrant and that those who have warrants issued against them could take action in the courts. How are they to know that a warrant has been issued? That would be a difficult question for the right hon. Gentleman tc answer.

Mr. Whitelaw: If I were taken to court on a civil suit and the demand were made that it should be known whether a warrant had been issued, neither I nor any Home Secretary could conceivably answer that question. 'The hon. Gentleman must understand why that is so. The moment one such question were answered the issue would be opened up and one would be asked whether other people's phones had been tapped. That is inevitable, and that has always been accepted in the House. That would have to be accepted in the courts.

Mr. Golding: Is the right hon. Gentleman saying that if the amendment were accepted as drafted any person could take the Home Secretary to court to challenge whether his telephone was being tapped?

Mr. Whitelaw: That is what I said in my speech.

Mr. Golding: If that is right, surely the answer is to amend the amendment in another place so that that cannot happen. I do not accept that it would be impossible for the Government to avoid that danger. Surely the Government can lay down in statute the conditions in which telephone tapping may take place without the Government endangering themselves by having to face a challenge in the courts.

Mr. Gorst: Is the hon. Gentleman aware that the situation is exactly today as the Home Secretary fears that it might be tomorrow? If an individual takes British Telecommunications to court on the ground that it is tapping his telephone, it will have to prove that it is or it is not. If it says that it is, that can only be because the right


hon. Gentleman has granted a warrant. If it has not had a warrant, that fact will be revealed. Therefore, the Home Secretary is blown in any event.

Mr. Golding: The Home Secretary has advanced that argument and it may have validity. I do not brush it aside. If it has validity, let those concerned find a way to remove that objection. I cannot understand the right hon. Gentleman wishing to avoid the rule of law. That is what he is trying to do. He is saying "Trust us. We are reasonable chaps. We have Lord Diplock. Do you not trust him?" My answer is "Yes".
I am prepared to trust the Home Secretary as I am willing to trust Lord Diplock. However, I was bitterly disappointed when I read Lord Diplock's report. It was not because I considered it to be a whitewash or a cover-up. I was disappointed suddenly to realise the limitations of the scope of the inquiry. Lord Diplock took a sample of warrants signed. Given the Home Secretaries who have signed warrants in recent years, I should expect warrants to be found to be valid if traced back. I should have been shattered to read that in Lord Diplock's opinion the Home Secretary, or previous Home Secretaries, had been acting irregularly. I do not believe that Home Secretaries act in that way. I do not say that all my colleagues share that view, but that is a view that I hold strongly.
When I read Lord Diplock's report I was worried about the lack of concentration on the question "Is all tapping covered by warrant?". That is what bothers the members of the Post Office Engineering Union. They want to know whether all tapping is covered by warrant. The suspicion is that it is not. The figures that the Home Secretary has supplied do not correspond with what others feel is the truth. There is a gap. Therefore, the major problem is not that of the Home Secretary's control. There are other problems.

Mr. W. R. Rees-Davies: I do not think so. The typical problem does not relate to cases where the Home Secretary rightly gives a warrant, or decides not to give a warrant. It relates, unfortunately, to cases of which I have personal experience, in which someone who should not be a police officer, and is unauthorised by the Home Office, succeeds in carrying out the telephone tapping because he is a police officer. He does it in the honest, although wrong, belief that he is doing it in the pursuit of trying to convict criminals. There are other examples. How do we deal with cases which have nothing to do with the proper warrant of the Home Office, where people manage to intercept? How do we stop such people intercepting in that way?

Mr. Golding: I thought that I was saying that. My preoccupation was with those who were tapping in an unauthorised way.
We need legislation because unauthorised telephone tappers now risk little. There are criteria in a White Paper and there are obscure Post Office regulations, but there is no specific legislation which threatens people with dire penalties if they tap a telephone without authority or a warrant. The Home Secretary is ducking out of the seriousness of the situation by seeing it only from his own desk and by looking at what he does himself. I would not say that there is no way in which he can know everything that is happening, but he should ask himself whether he

knows what is happening on the ground. If the answer is that he cannot be certain, he must ask himself in what way we can provide penalties for the tapping of telephones, whether it is for purposes of industrial espionage or whether it is by people in the security forces, the police or Customs and Excise exceeding their authority.
The amendment is moderate, to say the least. We removed parliamentary accountability because that involved the Home Secretary accounting for his decisions, although a substantial case can be made for it in this area by senior Members of the House.
We have put certain things in the amendment which are slightly offensive to me. I do not like the criteria of Members being taken into account when telephones are tapped, because that could affect trade unions, Labour Party demonstrations, strikes and the sorts of activity in which I am involved. However, I was prepared to agree with the hon. Member for Hendon, North because I thought that it was a stronger argument to the Home Secretary that we had adopted the terms of his White Paper.
I said the same about subversion. My hon. Friend the Member for Bethnal Green and Bow makes a good argument. It is difficult to define subversion, but it is included in the amendment, not because I would put it there had I been drafting for the first time, but because it is in the Home Secretary's White Paper. We put it in to make certain that all the criteria laid down in the White Paper were included in the amendment.
There is serious disquiet in this country. Disquiet might be expressed by learned judges and in the courts in Europe. The Home Secretary's only answer is that a by-product of the amendment could be that he could be challenged in the court to see whether a phone was tapped and whether a warrant had been issued. If the right hon. Gentleman's argument is no stronger than that, he should re-think in terms of principle and not in terms of pure expediency in the office of Home Secretary. I am sure that if he were convinced about the principle—which he ought to be—he would have found an answer, or his legal advisers would have done so, within days to the point that he made at the Dispatch Box.
The Government amendment is a get-out that is unacceptable to us. We shall reconsider the objections and return to the matter. If the Home Secretary thinks that he is settling the argument now on a legal nicety, let him forget that, because we shall be back to argue the principle over and over again. If the price of winning the principle is that we eventually find the right words, we shall find them. However, the Home Secretary will be discredited in the process.

Mr. John Browne: I sympathise strongly with the views of my hon. Friend the Member for Hendon North (Mr. Gorst) and the hon. Member for Bethnal Green and Bow (Mr. Mikardo). I feel strongly about the balance between the security of the realm and the protection of the individual citizen against the invasion of individual privacy. It is a difficult and serious subject.
I am not too worried about the number of telephone taps and such matters, although they may have risen by three times in 20 years, because I suspect that the number of telephone subscribers may have risen by more than three times in 20 years.
A difficult, subjective judgment must necessarily be made about the word "subversion". It is in the interests of


individuals in this country to put their trust in those who have been elected to such a high office as Secretary of State to exercise their judgment as to what is and what is not subversion. If we try to define "subversion" too strictly we may seriously detract from protecting the realm and individual citizens. There is evidence that the United States, under the guise of wanting to help open government and access of information, is doing the reverse of protecting individual citizens.
Therefore, I should like to thank my right hon. Friend for his speech. Having listened to his speech, I accept that he is a right hon. Gentleman and that therefore he is an honourable—indeed, a right honourable—and honest man and that he has access, not only to the facts at the Home Office but to vital secret facts—secret facts necessarily not available to us in the House. I for one am prepared to accept what he says and not vote against him in the Lobby. However, I should like to have his specific assurance that the protections which he has mentioned for telephone tapping also exist for electronic bugging. That can be a more insiduous practice because it is more open to abuse by unofficial sources than is telephone tapping.

Mr. Roy Hattersley: I rise not with the slightest wish, intention or hope of bringing the debate to an end but simply to encourage my hon. Friends with advice—which I am sure they do not need—to support the amendments. That is certainly the intention of the Opposition Front Bench.
I support them not least because I was sorry and surprised that the Home Secretary felt it necessary to introduce his amendment and to exclude the two major additions to the Bill which, if carried, would not only strengthen its provisions but end a good deal of the disquiet which continues to grow because of fear and apprehension that the interception of telephone calls and mail continues to a far greater extent than is acceptable in a free society.
Had the right hon. Gentleman felt that there was simply some deficiency in the amendment carried in Committee, or in the new clause tabled by my hon. Friend, it would have been open to him to offer an amendment in another place which met the principles but avoided the deficiencies. As it is, he has chosen to argue against the principles. That disappoints and surprises me, because the principles involved seem clear enough.
The first is utterly unexceptionable. Embodied in amendment No. 54, it is the belief that unauthorised interception of telephone calls should whenever possible be prevented or suitably punished. It is extraordinary that the Home Secretary should want to argue with that. The unauthorised interception about which disquiet grows is something of which he clearly disapproves, yet he is urging us to vote against an amendment which makes a clear and unequivocal statement of the illegality of such behaviour and imposes a penalty on those who might behave in such an illegal fashion.
It is not a severe penalty. Some Labour Members think that the penalty proposed for unauthorised interception is comparatively light for what is a major infringement of the privacy—and, therefore, the liberty—of the individual. Despite that, the Home Secretary argued against that part of the amendment because he feared that if such cases appeared in court it would result in the revelation of

information which in the public interest it was undesirable to disclose. I am completely unable to follow that part of his argument.
Even if what the right hon. Gentleman said were accurate I would have doubts whether such infringements of liberty as are involved in unauthorised tapping should not be prosecuted because a prosecution might reveal things best left secret. But surely the problem does not arise in respect of unauthorised phone tapping, because the unauthorised phone tapper is prosecuted only with the approval of the Attorney-General.
I assume that if the integrity and security of the State is at risk, the Attorney-General will not authorise a prosecution. As far as I understand the normal practices of the Attorney-General, we will never know whether the prosecution has been prevented or whether the Attorney-General's fiat has been withheld because he regarded it as a frivolous prosecution which could not succeed in court or as a prosecution which might succeed but which, through its success or the Home Secretary's successful defence of his own position, might reveal facts that were better kept secret. I do not believe that the problem of court revelations applies to unauthorised tapping.

Mr. Lawrence: What is the right hon. Gentleman's response to the Home Secretary's point that if the Attorney-General does not give his fiat the game is given away that State sources are tapping a person's telephone, thus discouraging that person from carrying on activities which may lead to the discovery of crime, or worse? If the right hon. Gentleman is not being purely opportunistic in opposing this measure, why did the Labour Government do nothing in five years of office when the position on telephone tapping was exactly as it is now?

Mr. Hattersley: I shall ignore the hon. Gentleman's second and more trivial point on the basis that the technique of playing the man rather than the ball is always a recourse of incompetent footballers.
I was in the process of answering the hon. Gentleman's first point before he asked me to give way. The hon. Gentleman is "honourable and learned" and I am simply "honourable", so he will correct me if I am wrong. I am advised that it is not the practice of the Attorney-General to explain why he has or has not given his fiat for a prosecution. The Attorney-General might refuse a prosecution in such a case, as he refuses prosecutions in other cases, because he did not believe that it was a legitimate case to mount in court or because he thought that it was frivolously, maliciously or ignorantly pursued.
There would never be any reason to assume that the Attorney-General's refusal to authorise a prosecution was based simply on his fear that security would be at risk. There would be speculation about it, but there would be no necessary assumption which could be demonstrated by malicious persons.
The first part of the amendment relates to the prevention or punishment of unauthorised phone tapping. However, I regard the most important aspects of the amendment as those which seek to place on a statutory basis the methods by which authorised interceptions are approved and agreed. To me, that is a matter of principle. I have no embarrassment about describing a principle in this area, not least because of the way in which the most recent Diplock report, published last month, described with magnificent understatement the general attitude towards phone tapping.
For me at least, that report created more fears than it allayed. It said:
The exercise by the State of any power to read or listen to communications taking place between private citizens involves an invasion of their privacy and has always been looked on by the public with suspicion and distaste.
The House will have heard my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) give an account of interception techniques. Had he been wrong, I am sure that we would have been told as much. He referred to the interception techniques which are applied by the Post Office. Anyone who heard that description would feel the same sort of distaste about the interception of the mail as Lord Diplock rightly describes as the general attitude towards the interception of telephone calls.
That distaste is right, necessary and proper. That is how the public rightly see these matters, because each act of interception is an invasion of privacy. An invasion of privacy of that sort and in that way is a denial of liberties which should exist in a civilised society except under the most extreme and easily demonstrable circumstances.
It is intolerable that such invasions of privacy and infringements of liberty should be initiated at the discretion of one man or woman. In saying that, I do not question either the competence or the probity of the Home Secretary. In this particular, I am not even saying that I have the strongest suspicions about those who work for him. Like other hon. Members who have spoken, I suspect that the over-zealous officer sometimes takes action which is not authorised, and I would have hoped that such action could be dealt with under the first part of the amendment. My principal concern relates to authorised interception and how it should be regulated.
I believe that in a society such as ours these procedures should be regulated by statute, for two reasons. First, it ensures that they are used sparingly. Secondly, it provides the certainty that if they are misused the aggrieved party has legal redress. At present there is no statutory, objective or material assurance that the procedures are used sparingly, and a party who may be aggrieved has no legal redress.
I do not propose to embark upon the arguments about the nature of the Home Secretary's right to intercept. Nor do I propose to embark upon speculation about how those powers were derived. What is certain is that they are exercised on the Home Secretary's sole authority. The guidelines are, by definition, no real limit on his powers. They may occasionally inhibit him, but they never actually prevent him from using his own discretion. He may be—and no doubt is—checked in his actions by his own character, by honour and by prudence. He is, of course, hedged about by the usual political constraints in terms of the damage and embarrassment that may be caused if the powers are used wrongly or badly, but there are no formal, published, enforceable rules by which the Home Secretary must abide.
The amendment does no more than propose a number of such rules, in what I at least regard as comparatively unambitious terms. As my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) said, it does not require a regular report to Parliament, although many would regard that as essential if the libertarian aspects of the problem are to be protected. There is no requirement for an individual whose telephone has been tapped to be

notified after the tap has been taken off, although many countries require such notification—some a few days after, others some years after, surveillance has ceased.
Many free societies believe that it is the civic right of a man or woman at least to be told that this has happened after it has happened, on the principle that if it was justified the person is probably in prison, and that if he is not in prison the relevant Minister has probably behaved wrongly. The amendment merely seeks to lay down the criteria by which the propriety of interceptions is determined and to ensure that, if necessary, a Minister who has erred can be taken to court.
I shall deal as best I can with what appeared to me to be the Home Secretary's principal objection to doing that—that he might be taken to court in such a way as to require him to defend himself by providing information which in itself would undermine security, not least by allowing people who were perhaps not subject to tapping but who were conspirators with those who were, to obtain information permitting their escape and continued wrongdoing.
That defence seems implausible in this context. I cannot imagine who are the people who will take the Home Secretary to court claiming that he is tapping their telephones. I can imagine that there might be one or two frivolous or malicious prosecutions, but I think that the Home Secretary can stand that. My hon. Friend the Member for Bethnal Green and Bow gave examples of telephone tapping. Some of those may not have occurred. I do not question my hon. Friend's accuracy. I merely use this as a hypothesis. If one of those people took the Home Secretary to court and the Home Secretary said, "I know that I am accused, but it did not happen", I cannot see what possible damage that could do.
The real problem, by the Home Secretary's own definition, comes from those whom he described as dangerous men against whom interception is employed. Is he saying that such desperate men will take the Home Office to court, complaining about their telephones being tapped? I regard that prospect as incredible.

Mr. Rees-Davies: What can happen, and has happened, is that the telephone calls of a member of the Bar defending a particular criminal are intercepted not on the warrant of the Home Secretary but in a gross breach of the regulations by the police. The right hon. Gentleman is surely not saying that in those circumstances the persons concerned, either the barrister or his client, may not take proceedings—indeed, they probably would take proceedings—and possibly obtain damages. That would involve the Home Secretary having to defend himself in order to establish that a warrant was not issued, and the whole matter would come out. It is a difficult question. Will the right hon. Gentleman consider how it is possible to find a way which does not bring the Home Secretary into it at all? The Home Secretary, after all, is probably thought to have every right to issue a warrant in the circumstances in which he does so. But how does one secure protection against the unlawful intervener?

Mr. Hattersley: I am defending and supporting an amendment written by another, so the hon. and learned Gentleman should perhaps not ask me to consider writing these things into it. Nevertheless, I defend and support the amendment with some conviction, as I believe that it meets the hon. and learned Gentleman's point exactly.
I am trying to deal with the situation in which a warrant has been issued and an interception authorised. The cases deployed by the hon. and learned Gentleman are dealt with in the first part of the amendment. Subject to the Attorney-General's approval they would be prosecutable in the normal way, provided that the Attorney-General gave his fiat.
The point that I am making concerns those occasions when the Home Secretary decides that interception is necessary, when his warrant is issued and his power is used. The Home Secretary expressed the fear that sometimes a reckless or malicious individual might prosecute him for having misinterpreted the powers laid down in the statute. I believe that that would virtually never happen. It seems inconceivable that a person of the kind described by the Home Secretary would wish to operate in that way. Moreover, even if it happened once or twice and the prosecution of offenders and the detection of crime were reduced in the one or two instances in which this extraordinary state of affairs had come about, I would regard that as a proper price to pay for ensuring that the liberties of the individual and his freedom from interference are properly protected.
As the Home Secretary himself has said, these are matters of balance between the freedoms and liberties of our people on the one hand and the need to ensure a reduction in crime on the other. The occasions on which prosecutions of the Home Secretary for tapping someone's phone might conflict with the security of the State or the prosecution of crime must be so rare that they should not weigh against the necessity to do what the amendment describe.
The amendment has three objects. First, it seeks to ensure that interception is carried out only for serious offences. That must surely be right. Secondly, it seeks to ensure that interception is carried out only when normal methods of investigation have been tried and have failed, or seem unlikely to succeed. Surely that, too, is right because of the distaste which Lord Diplock described as being the attitude of the British people to these matters and their natural wish that such practices should be used only when more orthodox practices have not worked, or seem unlikely to work.
Thirdly, the amendment seeks to ensure that such techniques are employed only when those who employ them are of the opinion that a conviction will result. If we regard this as an unpleasant practice, we should remember that it is a concept not unrelated to that of the just war. Such practices should be followed only when we believe that there is some hope of success, for to carry them out when there is no hope of success is to approach frivolity, which would not be appropriate in these matters.
Those three criteria will not only act as a proper check but will reduce the number of occasions on which telephone calls are intercepted. Those who have read the necessary background to this issue will recall that the Birkett report, published 24 years ago, stated:
We are satisfied that interception is highly selective and that it is used only where there is good reason to believe that a serious offence or security interest is involved.
That has been believed for so long that the Labour Government in which I served published the report in 1977. We were so satisfied with Lord Birkett's report that we thought it right to do so. That statement from the report may be true.
Many interceptions may be the result of technological change. Technological changes are available not only to the State but to wrongdoers, who thus obtain more sophistication. However, that is not the issue. The issue is whether interception is used when it should not be used and whether its use should depend on an individual's decision regardless of how trustworthy, respected or senior he may be.
If the Home Secretary speaks again, perhaps he will say whether he accepts the figures that have been given about the cost of interception and the number of interceptors employed by the Post Office. Those figures are likely to appear in an article in tomorrow's edition of the New Statesman.  If the paper's techniques are the same as when I worked for it, the copy is still open to correction. If the figures are materially wrong, the assiduous sub-editors on the stone will no doubt be prepared to include figures that correspond with the Home Secretary's beliefs.
It is dangerous and disquieting that 1·5 million should be estimated for next year and that between 110 and 130 Post Office employees should be working full-time on the techniques of interception. Those of us on the Labour Benches who support the amendment do so because a principle is involved in the way that necessary powers are used. I am not saying that the techniques of interception are not a proper weapon in the war against crime. Of course they are. I am not saying that the powers of law and order should be prevented from carrying out their proper duties. However, in a society in which conduct is regulated by Acts of Parliament and in which those who fail to fulfil those Acts are taken to court, people should be able to have that redress on this issue.

Mr. Barry Henderson: Although I appreciate the points that the right hon. Gentleman has made, I am sure that he would wish to avoid the charges of shallowness of thought, of hypocrisy, and of political opportunism. Since the war there have been six Labour Governments and many more Labour Home Secretaries. Why is it only now that the Labour Party seems to think such legislation appropriate?

Mr. Hattersley: I have three answers to that. First, if I had wanted to give a simple technical answer—the sort that gets politicians a bad name-1 would have said that we had become more concerned because of the increase in the number of interceptions. I would have said that there came a point when a new technique was needed for managing those increases. That might be the professionally adept answer. The second point, which is perhaps not so professionally adept but which is right, is that I strongly believe that such matters should be controlled by law and subject to appeal in the courts.
I hope that the hon. Gentleman will forgive me if I say that my third point is that since this subject involves civil liberties and privacy it is best discussed not in terms of trivial party points or differences but in terms of the principles of the issue. I stand on the principle that if telephone tapping is to continue and if the interception of mail is to continue—both must, for the sake of law and order—they should be regulated by statute. Those who are offended by the way in which such interceptions are applied could then appeal if they thought that such methods had been misused
My final point may demonstrate the strength of my beliefs. The Home Secretary said that my hon. Friends


were wrong to compare practice in the United Kingdom with practice in other countries, because their legal and historical traditions differed from ours. He felt that that was one reason why the Federal Republic of Germany should not be cited as an example. When he said that, I was irresistibly reminded of a distinguished son of the Federal Republic of Germany, Professor Rolf Dahrendorf. I believe that it was in his second Reith lecture that he said that the history and traditions of the rest of Europe were separated from those of the United Kingdom because of the British preoccupation with secrecy. He referred particularly to the secrecy that surrounded the behaviour of those in authority. Indeed, he said that one thing that maintained authority in the United Kingdom in a way that it was not maintained in other countries in which other moves existed was the withholding of information from the people. He said that information lay in the hands of the few and that people had to fight to obtain it.
One of my reasons for supporting the amendment is that I want more information to be in the hands of the people. The amendment will achieve that.

Mr. Alton: I support the amendment. It is similar to but not quite as strong as an amendment that I supported in Committee. As the hon. Member for Newcastle-under-Lyme (Mr. Golding) said, it is an indication of the desire of hon. Members to see enacted legislation that would protect the right of individuals that they have gone out of their way and are prepared to give some ground over the wording of the amendment. As the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said, it may not go far enough for many hon. Members. However, it may be considered a good start along the road of protecting individuals.
The amendment must also be seen against the background of the Diplock report. Many of us found that report profoundly disappointing, given the growing disquiet felt by many about the growth of telephone tapping. The hon. Member for Hendon, North (Mr. Gorst) spoke eloquently, as he did in Committee, about the concern and disquiet experienced by many of our citizens. I congratulate him on the stand that he took, not only tonight but in Committee. He has tried to persuade many of his right hon. and hon. Friends of the need for such legislation.
We have heard many hair-raising stories. The hon. and learned Member for Thanet, West (Mr. Rees-Davis) spoke about lawyers' telephones being tapped. The hon. Member for Bethnal Green and Bow (Mr. Mikardo) spoke about reports in The Guardian to the effect that American surveillance teams had been tapping the telephones of Members of Parliament. We have also heard about the enormous costs involved. If we allow the Bill to be enacted it will become a charter for nosey parkers and busybodies, who will spend their time prying and snooping into people's affairs.
I support both provisions because, as I said in Committee, my colleagues and I are opposed to unnecessary telephone tapping and the interception of and interference with mail. We believe that it is one of the most severe invasions of privacy. Such infringements may sometimes be necessary, but only in the most exceptional circumstances. Undoubtedly, some of these methods of crime detection have an important part to play at a time

when the sophistication of international criminals and terrorists requires police and security authorities to adopt sophisticated methods to uncover and combat their activities.
These provisions represent a significant attempt statutorily to protect the freedom of individuals and their right to privacy. That right is inherently a part of any modern society that calls itself democratic. Unless there is a statutory authority and, consequently, some type of legal justification for circumstances in which surveillance is proper, we may find ourselves subject to the whims and caprice of a Home Secretary who can abridge those rights and freedoms with impunity.
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My right hon. and hon. Friends and I support the intention to restrict by statute the occasions on which it is deemed necessary to intercept telephone communications and mail and the attempt to strike a proper balance between permitting authorities to conduct serious investigations untrammelled by petty interference, and displaying due regard for the rights of possibly innocent people.
The hon. Member for Bethnal Green and Bow referred to the Malone case. I think that the House would be well advised to consider the implications of that case because it serves as a warning which should not be left unheeded. Some safeguards must be laid down by Parliament to guarantee the proper exercise of surveillance techniques. Clearly, common law is not enough.
The provisions would also serve in a small way to comport with the United Kingdom's obligations under the European Convention on Human Rights. As I said in Committee, while it is apparent that currently the Government are evading their obligations under article 8 of that convention, which guarantees individual rights to private life and personal correspondence, the provisions of the amendment may narrow the gap and place the United Kingdom Government in a more tenable position to profess that they are truly champions of individual rights and are a reasonable example of a democratic society.
One of the major problems that stand in the way of such a profession is that currently there are no domestic remedies for violating fundamental rights. It was for that reason that my noble Friend Lord Wade introduced a Bill of Rights in another place which has as its aim the incorporating of the European Convention into domestic legislation. I want to draw the Government's attention to that Bill which is currently awaiting Second Reading in the House having completed all its stages in another place for the second time in two years. That is a clear indication of the growing concern of many Members in the other place of the need for a framework of legislation to protect and safeguard the rights of individuals. The clauses need to be seen in the context of the need for a Freedom of Information Bill, because people should have the right to know. That is why I said in Committee, and repeat now, that there is a great need for people to know whether their telephone is being tapped. I do not see that that goes against the maintenance of law and order. In many ways it would serve as a warning to those who are prepared to run in the face of law and order.
Sometimes I think that there is a need for interception of mail and telephone tapping, but in a civilised and democratic society we must bring about the right checks and balances and that must be done by statute. There is a


need to import the European Convention on Human Rights into our legislation. We need to see the legislation in the context of the need for a Bill of Rights and for freedom of information legislation.
One of the hallmarks of a democratic society which has respect for the rights of the individual is its demonstration of support for the individual's right to express himself and to differ with prevailing opinion when he considers that it is important and in keeping with his principles. Such a respect for privacy must be safeguarded. That is why the new clause and the amendments are so important. I hope that Conservative Members will support the hon. Member for Hendon, North and that Opposition Members will support their Front Bench with the others whose names are on the amendment.

Mr. Martin Stevens: I agree with the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) that this is not a matter of party controversy. It is a difficult subject and, as he knows, a number of my hon. Friends agree with much of what he said, I am not one of them, but I recognise that there are two entirely honourable views. The hon. Member for Liverpool Edge Hill (Mr. Alton) expressed the classical Liberal view on the subject. One does not always hear the classical Liberal view from the hon. Gentleman, but I was glad to hear it today.
The issue seems to be much more one of practicality. It is not reasonable to say that if someone's letters are opened or his telephone is tapped he should be aware that that is happening. I do not believe that the new clause suggests that that should be so. The proposition is that in the event of misuse of the power and the Home Secretary's code of practice being flaunted the ultimate arbiter of the offence should be the courts. I do not think that this is correct or practical. Those who take my view will accept that any Home Secretary of any party will use his powers responsibly. The code which he will lay down will be known to the House. It will not be arbitrary or dictatorial. It has not been in the past. But if officers of the security services or others misuse their powers, it is right that they should be dealt with by the Home Secretary and that the matter should not be discussed in open court.
I quite understand that I appear to be supporting a secretive approach, but we must face the fact that we live in a society where all too often the trappings of democracy are utilised not to reinforce democracy but to destroy it.

Mr. Gorst: I follow my hon. Friend's argument completely. He is saying that if people offend against practices they should be punished. But how can they be punished if there are no penalties in law? How can the Home Secretary punish someone in the public service who offends against the regulations—in other words, someone who taps without a warrant? How can the Home Secretary discipline someone who is not in the public service? What penalty can be imposed on him?

Mr. Stevens: I am arguing on the basis not of abstract codes of honour, justice or the liberty of the individual but of sheer practicality. On the basis of sheer practicality, I think that my hon. Friend will find that the heads of great Departments of State find ways of causing those of their officials who exceed their duties to regret that they have done so. If my hon. Friend is suggesting that employees or servants of the State will tap telephones, there is a risk of that happening whatever we may do in this debate.

Mr. Gorst: Three years in prison or a £5,000 fine.

Mr. Stevens: The core of my argument is that the Home Secretary has a prime duty to oppose the forces that seek to use the weapons of democracy to undermine democracy. We must give the Home Secretary—be he Conservative, Labour or a member any other party—the power to discharge his duty without involving him any further than we must in the restraints that the present proposals would impose.

Mr. McWilliam: I was interested in the speech of the hon. Member for Fulham (Mr. Stevens). I wonder what he meant by talking about those who would use the weapons of democracy against democracy. I believe that the weapons of democracy are those that we should use to ensure that we have a flourishing, vital democracy that protects people. Democracy cannot itself have weapons that will act against itself.
As the original mover of what is now clause 47, I little realised just what trouble it would stir up when I tabled it. I tabled it because I had read the White Paper. I had realised its shortcomings and the shortcomings of the role given to Lord Diplock. It seemed to me that yet again nothing would be done, and the matter would be covered up.
I have every respect for Lord Diplock. His report was excellent as far as it was allowed to go, but unfortunately it was allowed to cover only matters that are already adequately covered. Lord Diplock's terms of reference were to consider what was legal and properly covered by warrant, which is not our concern tonight.
I listened carefully in Committee to the hon. Member for Hendon, North (Mr. Gorst). I took his points, which is why I support amendment No. 54. He argued strongly that the drafting of the new clause was faulty, that some points were not properly stated and that others could have caused problems. Like my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding), I accept the hon. Gentleman's suggestion that "subversion" should go back in. I also support the argument that there should be reference to numbers, but only because it is my fundamental belief that, in terms of the liberty and privacy of the individual and the rights of citizens, the House has a duty to act as one. Because of the Home Secretary's attitude, the Government are putting on a three-line Whip to oppose the amendment and the Opposition are putting on a three-line Whip to support it. That is a terrible indictment of British democracy. We are discussing the right of individuals to privacy in what is alleged to be a democratic society.
The Home Secretary opposes the amendment because he might be taken to court to answer for his decision, because he might just have transgressed against an individual's liberty. In that case, he should be at the Bar of the House apologising. If any Home Secretary is in danger of transgressing against the liberty of an individual, that is where he should be. If the Home Secretary is taken to court, I have no doubt that he will have a good defence, as he will have properly considered the warrants that come before him, as Lord Diplock confirms.
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It is equally interesting that the Home Secretary accepts responsibility for all telephone tapping. I am pleased about that. When I table questions about the Foreign Office, the Ministry of Defence, MI6 or the American Security


Agency tapping telephones he will not try to block them. He cannot. At the Dispatch Box he has accepted responsibility. I hope that he realises what he said. I believe that he meant to say that he accepts responsibility for telephone tapping within the area in which he is allowed to exercise responsibility, but that is not what he said. Hon. Members on both sides of the House are concerned about the other area.
I could describe at length the ways and means of telephone tapping. Apart from my hon. Friend the Member for Westhoughton (Mr. Stott), I am probably the only hon. Member who can. The Home Secretary believes that control is properly exercised and that telephones are not tapped, and Lord Diplock confirms that, but I respectfully suggest that neither would know a bug if it jumped up and bit him. The Home Secretary relies on the advice of his officials—the same officials who seek to hide behind his coat tails. That is deplorable.
The Home Secretary said that it was a matter of the balance between the rights of individuals and the security of the nation. He went on to say something that the head of a police State would be proud of—that he does not wish to be publicly answerable for his actions. He wants to have secret information and hide behind the secrecy. The Prime Minister keeps telling the world that Britain is a democracy. The Home Secretary could have fooled me tonight. When people's private communications can be intercepted and they cannot find out why, that is not democracy. The Home Secretary in most cases does not even know about it. He quotes figures, but I can give him privately the number of lines in each telephone exchange used for interception.
Should we have to rely on members of my union, the Post Office Engineering Union, reporting indirectly that they have stumbled across a tap in order to gain control? The regulations state that if a man stumbles on a tap he finds the number of the area security officer in the directory, tells him about it and forgets the matter. If the security officer wants it taken off, he will telephone back; if he does not, he will leave it there. The engineer does not know whether it is legal. That is an entirely inadequate defence for individuals. In a 10,000-line telephone exchange, with only a couple of engineers, there may be one, two, three or four taps. The odds of an engineer stumbling on a tap are slim, but once in a while he does.
I listened carefully to the Home Secretary in the hope that he would come some way to meet us. We went a long way towards meeting the objections to my original clause. The right hon. Gentleman has a duty to look after every individual, not only his own civil servants. A democratic society is based on the support of an individual's rights against the self-interest of the State. The Home Secretary has manifestly failed to support individual rights. All hon. Members interested in democracy and individual rights should support the amendment. The Home Secretary has not made his case.

Mr. Christopher Price: I start with a couple of tributes. I pay tribute to the hon. Member for Hendon, North (Mr. Gorst) for persisting with this amendment in spite of the pressure that all those who have anything to do with politics know that only the Conservative Party can mount when this sort of thing takes place. We see now one of those curious alliances between the Freedom

Association and the National Council for Civil Liberties that has already been noticed in California and other parts of the world when those people who see themselves as perhaps on the far Right and passionately in favour of liberty get together with those people who see themselves perhaps on the far Left and passionately in favour of liberty.

Mr. Gorst: I am grateful to the hon. Gentleman. I must spoil his opening point by saying that I do not belong to the Freedom Association, although I do believe passionately in freedom. I am not sure that I would accept a description of myself as being on the far Right, either.

Mr. Price: Of course, we must all describe ourselves. I accept the hon. Gentleman's explanation completely. The only aspect of the debate that has saddened me is that, although the hon. Member for Hendon, North got a large number of Conservative members to sign his early-day motion we have not heard their voices in the debate as loudly as I, and also, I am sure, the hon. Gentleman, would have wished. I hope very much that at the end of the day they will put their feet where their signatures on the early-day motion were. I feel that they may not do so
The only way in which this House can operate is when, on occasions of this kind, Back Bench Members on the Government side are willing, from time to time, to defy their Whips and vote against their own Government. Some of the most glorious moments in the history of the House have occurred on such occasions. I pay tribute to the hon. Gentleman. I hope that he has one or two, if not 44, hon. Friends in the lobby with him today.
I should also like to pay tribute to my hon. Friend the Member for Blaydon (Mr. McWilliam) and his fellow members of the Post Office Engineering Union. It is a tradition of the House that when there are two or three hon. Members who actually know about a problem, who have worked with a problem and who have lived with a problem in their working lives, the House listens to them rather more carefully than to others. The House consists of lobbies. If the farmers say something, we tend to listen to what they have to say.
When someone such as my hon. Friend the Member for Blaydon, who has spent his life in an industry where he personally had to engage in these distasteful practices and when he conducts himself in the House wholly in line with the regulations to which he put his name on signing the Official Secrets Act at the age of 16 and tries to draw the attention of the House, without giving away any vital secrets of the country, to something that he feels is improper, it is vital that the House should listen. No one, not even Chapman Pincher, could accuse any of the three members of the Post Office Engineering Union in the House of being a Lefty, a Trot or a secret Communist. By and large, that trade union happens to be rather on the right of the trade union spectrum in Great Britain. It is an added reason why the House should sit up and listen and not merely sweep them under the carpet when we hear from members of this trade union objections of that weight.
If we follow the Home Secretary's advice, take absolutely no notice of the amendment and revert to the form in which the Bill first came forward, we shall be asking the colleagues of my hon. Friend to continue to carry out a distasteful job in areas where many hon. Members believe it unnecessary. This is quite apart from the issues of invasion of freedom and invasion of privacy.


While supporting the amendment, I associate myself with the suggestion of my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) that the word "subversive" should be removed. What, in effect, does the word "subversive" mean in this amendment? It means literally anyone that a particular Government in power do not like. The Tory Party is subversive to a Labour Government and the Labour Party is subversive to a Tory Government.
I do not believe that "subversive" is a word that we can ask the courts to pronounce on. I do not think that it is the sort of concept that should creep into our legislation. There are plenty of words that could be used about illegality, terrorism and espionage that are already in the amendment. They are proper to be in legislation.
That is only a detail of the issue. The basic principle is whether interception of communications should be put under the rule of law. I found the Home Secretary's argument breathtakingly ludicrous. I do not think that he believes a word of what he was saying. Nor do I believe that whoever wrote his speech for him made any effort to grapple with the deep argument before the House. The idea that the Home Secretary should be put up to read a trivial brief—

Mr. Whitelaw: I must object. I believe every word of what I said. What is more, I went over it very carefully. I wrote large parts of it myself. I would not pretend that I wrote every bit of it, but I wrote a large part. I believe it passionately.

Mr. Price: The Home Secretary knows my admiration for many of the things that he has done. I do not believe, however, that an argument of this kind about fundamental liberties and privacy of citizens of this country, which have been canvassed by reports from Kenneth Younger's report onwards over the last decade and about which the Home Office has done absolutely nothing, ought to be met by the sort of legal trivia that the Home Secretary put before the House. I do not make a party point. I think I was more critical than any other member of my party of my own Home Secretary when I was sitting on the Government side of the House.
I should like to take the Home Secretary's arguments one at a time. What he was really saying was that on issues of this kind, involving secrecy, one could not legislate, because if one did the matters might be litigated in civil cases before the courts, and he might have to say something about them. That is an argument about every section of every Official Secrets Act that this country has ever had. What the right hon. Gentleman is really saying is that we should have no official secrets legislation at all, because if it were litigated before the courts certain matters might come out and endanger democracy.
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As many of my hon. Friends have said, it must be a matter of balance. I may be wrong, but I did not hear the Home Secretary address himself to the issue of balance. He simply said that someone might sue him and he might have to say certain things in public, that that would be terrible, and that therefore we could not legislate on the issue. If I am wrong, I apologise to the right hon. Gentleman and I shall listen carefully to the winding-up speech for the Government. On an issue of this gravity, the House demands more serious arguments than the Home Secretary offered us.
The right hon. Gentleman cannot have it both ways in regard to the courts. He said that Lord Diplock produced

a wonderful report. I agree, as far as it goes. I do not take issue with the report, but I agree with what everyone else has said—that it did not cover unauthorised tapping. But the other part of the Home Secretary's argument was that in a sense we could not trust the courts—that they might be bound to allow to come into the open matters which, if known, would endanger the security of the State.
I have followed these matters. In every case in which the courts have had to deal with sensitive security issues over the past 10 years they have leant over backwards to hold hearings in camera to prevent from coming into the open things that should not come out. To say that we cannot trust the courts to keep secret matters that should be secret is to run against the whole of case law and matters taken in camera in our courts since the Second World War. It is a specious argument to say that because there may he a risk of the Home Secretary's being sued, and then a risk of a judge's refusal to take in camera something that the Home Secretary asked him to take in camera, we cannot pass the amendment. It is not the quality of argument that should be advanced to the House. We deserve much better.
I should like to give just one example. The last time that I know of—though there may be many other times—when the Home Secretary's discretion was litigated in the courts was over the expulsion from Britain of Mark Hosenball and Philip Agee. I was the one who moved in the House to have Mr. Reginald Maudling's statement in the House put before the courts, so that they could consider his discretion. When the case reached the Appeal Court Lord Denning's judgment was clear. He said, "There is no question. If the Home Secretary says so, I shall not go against his discretion." Therefore, for the Home Secretary to say that he is frightened that the courts might let out into the open something that should not be let out is, in my view—I say this as one his admirers—an argument unworthy of the House. The right hon. Gentleman said that he wrote much of his speech. I hope that he did not write all that much of it, because it does not elevate him in my estimation.
I come to the point made by my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) and my hon. Friend the Member for Bethnal Green and Bow about cost. Parliament's supreme duty in these matters is to supervise moneys expended by the Government. My right hon. Friend said that tomorrow figures would come out showing that this year £1·3 million is being spent by the Post Office, soon to become British Telecom, on telephone tapping. That suggests that there are between 110 and 150 employees engaged in telephone tapping. That is meant to match up with the 463 warrants that Lord Diplock revealed were authorised by the Home Secretary.
I am dealing now with what might be described as purely the technical British Telecom business of telephone tapping—not the expenditure of the Government communications headquarters, MI5, MI6 or any similar body. The House, which we call the Mother of Parliaments, is entitled in 1981 to a simple "Yes" or "No" answer to the following question: is that the money that is spent on telephone tapping?
Over the past few years the Ministry of Defence has become increasingly open—indeed, free and easy—about costs. We have been told what Trident and cruise will cost. That is right, because Ministers should be answerable to the House. Only the Home Office persists in this anti-democratic attitude of refusing to tell the House how much


money it is spending on these activities. I hope that the Home Secretary will tell us whether the figure of £1·3 million is the correct amount for what is spent this year on telephone tapping. Parliament has the right to be told.
The Post Office, as it does from time to time, has reorganised its telephone tapping division, which is now called the equipment development (policy) division, and goes under the name of ES4. That is known and can be looked up in the local library. But we want to know how much it costs, and it is an affront to the House if that information is not to be made available.

Mr. Stevens: The hon. Member for Lewisham, West (Mr. Price) should remember that it has not been the universal practice over past years to disclose to the House the amount of, and method of spending, secret funds. After all, it was Mr. Stanley Baldwin who gave the income from the Duchy of Lancaster to the Committee of Imperial Defence before the war, for which he was not answerable to the House but without which we should not have won the war. The hon. Gentleman's argument is not quite as sound as it would appear at first glance.

Mr. Price: I was not talking about the budget of Government communications headquarters or about MI5 or MI6. I was talking about the budget in this respect of what is now the Post Office, and what is to become British Telecom.
It has become increasingly the practice to publish these figures in Western countries which are more economically efficient than Britain. Britain stands almost alone in its determination not to give the broad cost figures for its security services. I do not see what the danger is. Let us not imagine that the Russians do not know how much we spend on telephone tapping. The only purpose of the Home Office is to stop the British people knowing. Britain should give more information about these matters, as now happens in the United States.
I agree that the situation is not easy. As was said earlier, there is now little difference between tapping by attaching a wire to a telephone and other surveillance devices, for which we cannot expect either the Home Secretary or the Post Office to be responsible. Indeed, one can tap homes without even touching the telephone. The manager of my local telephone exchange told me the other day that much of the tapping is now done by what is popularly know as bugging, which does not involve the connection of a wire to a telephone and is done in many different ways.
There has been a series of moves ever since Mr. Brian Walden—who left for lusher pastures one day a week on London Weekend Television, instead of five days a week in this place—withdrew his Privacy Bill, which he won in the ballot, on the promise of the then Home Secretary, Mr. Roy Jenkins, that the Government would act on privacy. That was 10 years ago. Since then the Home Office has done nothing and the problems have mounted.
Sir Norman Lindop produced a report on data protection, for which the Home Office is responsible. Again, the Home Office promised legislation some time—as soon as it was convenient—but nothing has been done and the problems of protecting individual privacy as technology advances have mounted from year to year. There is pressure from computer manufacturers for something to be done about the problem. Almost every other developed country has put such matters under

legislative control. The only body in the Western world to refuse to do so is the obstinate, pig-headed British Home Office.
I do not blame the present Home Secretary. I have criticised his predecessors just as much. It is a superhuman task to get any control over the activities of the Home Office and its arthritic refusal to act on any of these issues.
When one goes to Scandinavia, Germany or the United States and sees the safeguards that they have provided and is asked, "How do you regulate these matters in the United Kingdom?" one feels a sense of sheer shame that one cannot point to any regulation except that the Home Secretary asks us to trust him. We know that the Home Secretary cannot supervise these matters. He has a million and one things to do. When he says that he makes sure that there are no breaches of warrants we know that we are relying not on him but on all the other folk, from the "Yes, Minister" big folk to all the little folk who know that their promotion in the Home Office and the Civil Service depends on sticking to the ludicrous secret ethos, which is decades out of date and has nothing to do with living in a modern world.
I did not agree with what was said by the hon. Member for Fulham (Mr. Stevens), though it was nice to have one Conservative Member emerging from his Trappist vows in order to say something. The hon. Gentleman said that he had much sympathy with the new cause, and so on, but that there were those who would misuse the democratic procedures, among which he seemed to include the openness of our courts.
That is at the root of the matter. Our courts have a tradition of operating in the open. Parliament has a similar tradition, but our Administration, unlike that in the United States and those in many other countries, have a long tradition of operating in secret and being prevented by the Official Secrets Act from telling anyone anything that they have learnt in their official business.
The hon. Member for Fulham probably represents the middling sort of folk on the Conservative Benches and. He seemed to be saying that he would prefer to trust those who operate in a secret bureaucracy than institutions such as the House or our open system of justice. If he was saying that, his opinions do not accord with those of most people outside. I get an increasing number of letters saying, "I have always voted Conservative and I always intend to vote Conservative, but please go on saying what you are saying about open government." If Government supporters insist on resisting the amendment they are way out of line with public opinion.

Mr. Stevens: Will the hon. Gentleman say how many lives of loyal American public servants were lost as the result of the application of his theories by Mr. Agee?

Mr. Price: I have no evidence that any lives were lost. I am certain that in a democracy we need people like Philip Agee—and Mark Hosenball, who does not see himself as a martyr—to prevent democracy from slipping into the autocracy and dictatorship that has occurred in some European democracies. Turkish democracy has turned into military dictatorship; so has Greek democracy. It is only debates that regularly call the Home Secretary to order that stop the folk of this country who would like to see Britain's democratic institutions eroded into a dictatorship.
I find it astonishing that members of the Conservative Party who campaigned to win an election on the ground


that they believe in the rule of law should on an issue as fundamental as this blandly get up in the House of Commons and say, "Yes, we believe in the rule of law, but we do not believe that the rule of law should apply in this area". It is a complete contradiction of their stated belief in the rule of law.
It is because we Labour Members—and I hope an increasing number of Government supporters—believe that in an increasingly technological age our liberties need to be protected by the law and cannot be left to the ministerial responsibility of the Home Secretary and the bureaucrats that my hon. Friends and I, and I hope Government supporters, will vote for the amendment.

Mr. Cryer: The tone of the debate indicates that one day is not enough to deal with the important subjects that are being debated. Two separate days should have been allocated to the consideration of the subject of telephone interception, which has been brought to the Floor of the House only because a clause was carried in Committee. We have to thank the hon. Members who initiated the clause and those on the Conservative Benches who voted for it for giving us the opportunity to debate the issue.
The Government have resisted a debate on this subject ever since they came to office. Had this subject been an issue under the Labour Government I have no doubt that they, too, would have resisted a debate. There is a consensus to avoid discussion of subjects such as telephone tapping. It is an area where the "Yes, Minister" syndrome triumphs and where the "public relations men," as many senior civil servants call Ministers, carry out inner Government policies completely and effectively.
The hon. Member for Fulham (Mr. Stevens) said that we should not have a set of punishments for people in the public service who fail to carry out such procedures laid down by the Home Secretary. He said that the Home Secretary could find ways of punishing people himself. He said that the proposed new clause and clause 47 should not be necessary. The notion that the Home Secretary can by subterfuge punish people internally within the Civil Service is an alarming possibility.
The standard of public service can be maintained by the standard of operation being laid down and by internal discretion about promotion, placing, patronage and holding back people's jobs not being at the behest of an individual. If we do not operate that system there is only a narrow line between the Home Secretary administering what he regards as just punishment and the abuse of power.
The Home Secretary claims that our proposal would make him open to challenge in the courts. That argument was effectively rebuffed by my hon. Friend the Member for Lewisham, West (Mr. Price). The right hon. Gentleman's argument is a negation of the right of Parliament to legislate for every aspect of life if it chooses. The supreme body in this nation is Parliament. We have the right to legislate if we think that a matter should be placed clearly in perspective so that the ordinary citizen knows his rights and duties.
I do not say that we should legislate about everything. Indeed, the less legislation we have the better. We nearly always produce complicated legislation which is difficult for the average person to understand. However, Parliament has the right to legislate in many important areas. To say that the proposal would result in a challenge

in the courts and that therefore Parliament should not legislate is to negate the power of Parliament on the ground of secrecy.
The Executive is accountable to the House. It is better and more easily accountable on the basis of legislation than on a vague premise that the Home Secretary will tell us at some stage everything that is going on, or what he thinks that we should know is going on.
When the Home Secretary was speaking I was reminded of the Mines and Quarries Act 1954. That legislation placed an absolute duty on mine operators in a hazardous undertaking. The argument by the then Government was that legislation would put all members of the National Coal Board in jeopardy if they had not personally inspected a site and that they would be open to prosecution in the courts. That legal opinion was delivered with all the might of the Government of the day in the Committee which was discussing the matter, and of course it proved to be totally fallacious. No member of the National Coal Board has ever gone into court as a result of that legislation. One or two have gone into court for other reasons, but certainly not on the argument advanced by the Government. I must say that the Home Secretary's arguments rather smack of administrative convenience.
I intend to support new clause 8, which is an excellent clause, but I prefer clause 47 because it has the advantage of ensuring parliamentary accountability. In the previous Session of Parliament I introduced a Ten-Minute Bill with the object of introducing some parliamentary accountability into the House. That Bill, for what it was worth, was not opposed. It evoked some expressions of support from hon. Members on the Government Benches.
The reason why I introduced the Ten-Minute Bill and, by and large, the reason why we are debating this Bill today is the operation of the press. If it were not for that we should never find out how the internal machinery of government works unless we were actually working in the relevant Department. Secrets are not given to Members of Parliament, at least not by our efforts here. Secrets appear in the press through devoted journalists in some cases working hard at a particular subject. Barriers are put up against Members of Parliament seeking information. That must be clearly understood.
It is not clearly understood that, for example, when the Home Secretary answers a question with the simple word "No" he blocks all questions on that subject for three months. That device is used by successive Governments to stop probing questions being tabled by Back Bench members seeking to try to discover some aspect of the administration of the Government that he thinks it is in the public interest to bring out.
We must pay tribute to the work of the New Statesman. It seems to me that its original claims have never been answered, because the Home Secretary has always stated that he checks every warrant. But the New Statesman, on 1 February 1980, said:
Only the police, we were told, stick to the procedure of obtaining a warrant before placing a tap; the secret agencies have 'carte blanche'. Their activities may be covered by a general warrant, which counts as 'one' in accounts given to Ministers even though hundreds of lines may be involved.
Then it said:
Ex-Inspector Dick Lee, who headed the successful 'Operation Julie' drugs investigation, is reported as deploring the risk of abuse under present arrangements. He told the New Statesman: 'It is an executive Decision—there's absolutely no accountability.'


Perhaps he was lying, although why he should lie to a newspaper it is hard to judge. He was a police officer whose word was held in high regard in a court of law, who was involved in a very serious and successful breaking of a drugs ring. I think that we have to give some weight to that evidence when it is quoted in a serious magazine article.
These questions have never been answered, because the Home Secretary has put a block on the questions, and so we have been limited in access to the Table Office.
Several of my hon. Friends have mentioned tomorrow's New Statesman. My right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) raised a question about the galley proofs which have been thoughtfully distributed to one or two of us for tomorrow's New Statesman in which it is claimed that there are between 110 and 150 Post Office employees whose full-time job is to tap people's telephones. This is based on the figure of expenditure which has been obtained and the average wage of about £12,500 each.
The Home Secretary ought to answer that point—I suspect that he will not—because if what the New Statesman says is true it undermines the credibility of the Home Secretary's claims and successive reports. We cannot accept that there are between 110 and 150 people beavering away on three or four telephone taps a year. That is not credible. If they are doing that, they are doing more than about 460 phone taps a year, and those are the phone taps that the Home Secretary says that he authorises. What are they doing?
Is that true or is it merely a newspaper story that is based on nothing? We merely want to know, and fortunately and fortuitously we have a debate that gives us that opportunity. If we had an annual report to Parliament by the Home Secretary, stories in the press and individual complaints by constituents could be raised in the usual way and debated in the House. That would be a testimony to the strength of our democracy. If democracy is to have any meaning and strength we must maintain our democratic standards. We must not subjugate our democratic standards in the pursuit of their defence to the extent that democracy is eroded and no longer exists to a viable degree.

9 pm

Mr. Rees-Davis: Clause 47(8) specifically provides that there shall be laid before Parliament a report setting out the number of warrants made under specific headings. It would seem that provision is being made adequately for precisely what the hon. Gentleman is talking about.

Mr. Cryer: Indeed. I hope that, with me, the hon. and learned Gentleman will resist Government amendment No. 53, which seeks to remove clause 47. The clause as it stands is preferable to amendment No. 54, which was tabled in the names of a number of my hon. Friends. Neither clause 47 nor amendment No. 54 covers bugging. They cover only telephonic interception and not eavesdropping by induction methods as opposed to direct contact. They do not cover foreign and Commonwealth interception. As my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) said, they do not cover the National Security Agency of the United States. The lawful

basis for the operation of that agency seems extremely dubious. No clear legal basis or definition has ever been given in answer to my questions.
For those in the House who do not believe that these activities can possibly take place in our society, I ask them to ascertain why there is such a massive telephonic cable linking the tower at Hunter Stones with the station at Menwith Hill. On what basis was that authority given? These are matters of concern to those interested citizens who do not much like the idea of a friendly foreign Power—we have a long-standing relationship with America—being able to operate in Britain.

Mr. Mikardo: I hope that my hon. Friend will bear in mind that those who are prepared to justify the operation in Great Britain of the National Security Agency of the United States are horrified by the operations of the KGB in Czechoslovakia. To me are equally reprehensible.

Mr. Cryer: My hon. Friend has made the point admirably for me. He said that if we were debating these operations in the Soviet Union we would be condemning them, and rightly so.
If we have any estimation of the value of democracy, of debate, of argument and of an Opposition probing, examining, scrutinising and being a damned nuisance to many Ministers—I have heard former Labour Ministers talk about some committees as being a "damned nuisance" because they are probing, and no doubt they anticipate difficulties when they return to office—and if we value that sort of exchange, as I do, we must demonstrate that it is strong enough to resist encroachments by any Government agency and that we have a degree of openness that has been achieved, we hope, through parliamentary accountability.
However much people demean Parliament—and there are many influences outside that like to do so—it is our most important national assembly and it should be seen to be exercising some scrutiny of these murky areas. The areas which I have mentioned are not covered by the Bill. Therefore, it is a tentative step. Whilst interception is accepted by all hon. Members as a grave matter which interferes with the freedom of the individual, amendment No. 54 represents a retrenchment of the aims and aspirations of clause 47, because parliamentary accountability has been removed. I regret that.
Such retrenchment happens because those who moved the original clause, in the hope of getting some sort of accountability and statutory provisions so that our democratic system would be placed on a democratic and not a hidden and somewhat autocratic basis, in the Home Secretary's terms, wanted some legislation on the mater to go through Parliament. They were prepared to compromise so that the Government, knowing full well that there was support on Conservative Benches for democratic accountability and statutory provision, would say that they could see that there was a marked diminution in the provisions of the clause 47 and, therefore, that they would make a move towards it. However, they have not done so. They have plucked out every argument which they possibly can, including defective drafting of the clause. Had they been willing to accept the concept of a statutory provision they would have made use of their expert draftsmen and would have been able to produce amendments, as they have done on Report.
We are discussing an area of secrecy. My hon. Friend the Member for Bethnal Green and Bow has tabled two


proposals about subversion. The Home Secretary says that he has authorised every warrant for tapping. Perhaps he will explain how he thought the ISTC strike headquarters was a subversive organisation. During the steel strike, the two principal organisers for the ISTC phoned each other on a secret, preplanned basis to organise a picket, which was to be outside an ice cream factory. It was not relevant to the strike, but they thought that perhaps the police would not be aware of such trivial details. They were right. The only people who turned up for the prearranged picket were the police. It was a deliberate policy of entrapment to lure the police into making a move so that the organisers could discover whether the police had been listening. That action proved to their satisfaction that their phone was being tapped.
If the Home Secretary authorises every warrant, on what basis was the tapping of a trade union invoked? That was acting properly in pursuance of a trade dispute. That is a matter of concern, because there is an unhappy suspicion that some people who carry out tapping feel that any trade union or political activity which is to the Left of the Conservative Party is subversive. Therefore, I hope that the proposed removal of the word "subversive" in my hon. Friend's amendments will be supported, because it will make that shady area of subjective judgment less open to abuse.
It will be a sad day for democracy if the Government oppose the compromise in amendment No. 54. My hon. Friends have bent over backwards to try to meet some of the points made in Committee in order to get some provision through the House in the interests of the protection of the ordinary citizen. That is what this is all about. It is about the freedom, rights and liberty of the individual.
We must do something about that, because we are moving from the electro-mechanical age to system X—the electronic age of telephone communication. I understand from experts that system X is far more easily tapped than the existing system. If that is true we should here and now build up safeguards to stop abuses. We are moving irresistibly into an electronic age, and we shall see enormous advances over the next 20 years.
Whatever those technological and electronic advances may he, we must ensure that the liberty and abiding values of human beings are protected for all time. That means supporting my hon. Friend's amendments.

Mr. Rees-Davies: I wholly subscribe to the closing words of the hon. Member for Keighley (Mr. Cryer). The main reason for speaking in the debate is to draw particular attention to the new era which lies ahead. It is the era of bugging and immense electronic advance. We shall see the introduction of System X. We shall face an entirely new ball game in respect of both espionage and surveillance, in view of all the different electronic devices which will be used.
I know something of these, because I live in the house once occupied by the former Prime Minister—the right hon. Member for Huyton (Sir H. Wilson)—which was bugged from top to bottom during the time that he had it. Unfortunately, I was unable to keep those bugging devices. They had to be taken away, as did the direct line to the President of the United States. I have also had my own phone tapped, but more of that anon. Therefore, I think that I am fairly well versed at least in the practical

background of this subject. However, I am not too well versed in the technical expertise about which we have heard from hon. Members concerned with the Post Office.
It is an open secret that a large number of those in the Post Office are engaged daily in telephone tapping. Therefore, the first and major question which must be decided is whether we should now look at this whole problem and how it will affect the future. The answer must be "Yes, we must do so". I can say with a clear conscience that for the past 10 years or more both Governments and all parties have put this matter aside. But there is no real reason why it should be a party political matter.
I enter the caveat that in future we must look at this problem carefully to see whether we can meet it fair and square. Having said that, I come to the straight principle of whether the interests of State security are paramount. I come down on the side of the interests of the State being absolutely paramount. That being so, the question of secrecy must depend upon the decision and conscience of the Home Secretary. To that extent I entirely support the Government's approach along those lines.
It does not rest there, however. As I hope I can show, more unauthorised tapping of the type now taking place, and a very much greater amount of electronic surveillance which will take place much more easily in future, will arise unless we can find a way to stop it.
9.15 pm
There have been many examples over the years in which there has been unauthorised tapping of the lines of those engaged in the law. In my own case, this arose in circumstances about which I make no personal complaint. I do not think that I really had cause to complain, although I suppose that my client might have had cause to complain. It arose in the well-known case of Stephen Ward. I was advising Stephen Ward and, indeed, acting for him. It will be recollected that there was at some stage a consideration of the question whether he had a liaison with a Russian agent in this country, or at any rate with a member of the Russian embassy. Stephen Ward was an addict of the telephone. He was always ringing me up to try to get me to talk on the telephone about this or that. I told him frankly one day that I would not do that if I were him as my line was probably being tapped.
About a week later, just after Stephen Ward had rung me, I picked up my telephone and actually heard members of MI5 talking to another branch of the service on my line. That was within about 30 seconds of the receiver having been replaced. There is really no doubt that my telephone was being tapped at that time. I made certain inquiries, and there is little doubt that the tapping was unauthorised and was being carried out by a police or intelligence officer, zealous in the pursuit of his business but without a warrant. Certainly, it appeared that no warrant had been issued.
I make no complaint about that. I have not raised the matter over many years because I have no complaint about it. The person who might have had a complaint was Stephen Ward. I told him, but at the time he made no complaint either. One must recognise that in the great majority of cases in which this situation would ever arise nobody would make a complaint. In that instance, I made no complaint, because it did not damage me in the slightest, although I felt that perhaps I ought to be able to send my telephone bills to the intercepters, The problem was really that Stephen Ward could have had a legitimate complaint that confidential communications made by him


to his counsel were being intercepted. Had the matter been considered by the Home Secretary, the Home Sectetary might, even so, have come to the conclusion that it was in the national interest and in the interest of national security so to do. If he took that view, I would entirely approve.
We must therefore be careful here. As I see it, the decision of the Home Secretary in cases that he approves is paramount. It is not a matter for which one can legislate. One cannot put it in an Act of Parliament and say that it should come before the courts. I entirely share my right hon. Friend's view that it cannot. What concerns me, however, is that there is a considerable amount of unauthorised telephone tapping of the kind that I have described. This can be carried out—I do not say that it is—by quite a large number of those who actually serve the Post Office. They have not only the skill and the knowledge, but they are in a position to do this. Futhermore, nowadays it does not have to be done by actual telephone tapping. It can be done by bugging and by other devices. Moreover, very soon electronic devices will come in which will make it even easier. We must therefore be careful here. The next problem is that it is plain that some police officers without a warrant from the Home Secretary may be in a position to secure unauthorised telephone tapping. It is to this branch of activity that I should like the Home Secretary to confine his attention.
My right hon. Friend is entitled to the type of power that he has outlined. However, there must be complete confidence. That is why I am minded to support certain parts of amendment No. 54 and certain parts of clause 47. I see no reason why the Secretary of State should not report to Parliament each year on the number of warrants that have been issued. In the modern age, that is perfectly fair and represents the correct use of open government. The right hon. Gentleman should use his discretion in making policy decisions about the report. If my right hon. Friend feels it right—and it could well be—he could have an independent panel of three Privy Councillors or Members of Parliament along the lines of the provisions contained in clause 47(7). That subsection mentions a panel of three independent persons appointed by the Prime Minister. That could be of assistance to Home Secretaries in meeting the challenges of this new electronic age.
It is not right to say that the Home Secretary has shilly-shallied. His remarks were completely sincere. If, for example, Stephen Ward had decided to issue proceedings for damages at that time he would have issued them against the Home Secretary. The Home Secretary would have had to say that he had not issued a warrant. It would have been said that there was no smoke without fire. As a result, a police officer—or, as is more likely, someone in the intelligence service—who had carried out an unlawful tapping in pursuance of his belief would have been let down.
There might be an undesirable balance. Is it preferable to keep the Home Secretary and the Services out of this or is it better to legislate? On the whole I share the Home Secretary's view that such matters should not go before the courts. Difficult as it is, the House is, however entitled to the greatest possible measure of assurance that people cannot tap a line unlawfully when the Home Secretary has not issued a warrant.

Mr. Christopher Price: The hon. and learned Gentleman mentioned the theoretical possibility of Stephen Ward suing the Home Secretary. That is the nub of the argument that the Home Secretary put forward. Apart from the conversation that the hon. and learned Gentleman overheard, what evidence could Stephen Ward have adduced that would have persuaded the court to ask the Home Secretary to answer for his actions?

Mr. Rees-Davies: That would have depended on the evidence that I would have had to give of the conversation that I heard between the two members of the intelligence service when I intercepted their telephone conversation after they had evidently been listening to mine. It is unlikely that, if obtained, the evidence would be sufficient. That tends to support the Home Secretary's argument, namely, that he should have absolute discretion to perform his duty—as he faithfully does—just as other Home Secretaries have done in the past.
That means that the House is dependent on Home Secretaries to undertake thorough investigations to ensure that unauthorised tapping is not done by intelligence officers or police officers. That is the fear that I have in certain instances. I have a great fear for the future concerning the development of electronic surveillance of every kind.
I hope that my right hon. Friend will take every opportunity to monitor this system and ensure that there is no abuse of his warrants in any cases that he can avoid. I hope that he will always be extremely careful in that regard.

Mr. Bruce George: The House will be pleased to hear that I do not intend to speak at great length. It is a pleasure to follow the hon. and learned Member for Thanet, West (Mr. Rees-Davies). He has exposed tapping and bugging, of which he has had personal experience. What causes anxiety are not the cases that have come to light but the hundreds and thousands of cases that over the years have not been exposed. He has shown that tapping and bugging are not recent phenomena dreamed up by sections of the media but that they have been with us for many years. We can be thankful that people have been more vigilant in the past and that they are now exposing what has been going on behind closed doors.
As politicians we are used to most of our words being recorded, disseminated and sometimes used against us, but at least we are aware of what is being done. These are not the ramblings of people suffering from paranoia, who think that every word is being overheard. The foundations for our worries have been expressed so eloquently inside and outside the House especially during the past 12 months. It may have escaped people's notice that the amendments are supported by all shades of political idealogy and all sections of the political spectrum in the House. I am sure that my hon. Friend the Member for Keighley (Mr. Cryer) will not feel that I am insulting him if I say that he is on the Left of the Labour Party. I think that he would be quite pleased. On the other hand the hon. Member for Hendon, North (Mr. Gorst) is certainly not on the Left of the Conservative Party. I have not heard of any pronouncements from our erstwhile colleagues, but perhaps they have not yet got round to making policy pronouncements. All sections of opinion, including the


Liberal Party, are clearly in opposition to the Home Office's perspective. Clearly the time has come for legislation.
What has happened over the past few months is an indication of an increasing vitality in Parliament. Perhaps confounding Prof. Griffiths' analysis of parliamentary Committees to the effect that apparently they have no use and that few amendments are carried, here is an example of a holy or unholy alliance across the Floor of the House which is of benefit to the country and to the House.
I do not deny the right of the State to monitor conversations. Every State does it and every State has the right to do it. But it must be done in limited circumstances if the proper controls are exercised. Together with many others, I am not convinced that all the controls are being exercised. Reports and investigations reveal only what people wish to see revealed. The Diplock report is a classic case of a report not even looking at the tip of the iceberg. If anyone thinks that that limited number of cases represents anything other than a tiny fraction of cases of bugging and tapping, he is being excessively naive. We are witnessing an incredible increase in interception of communications by the official organs of the State, either legally or illegally.
I regard as a more sinister development surveillance by private individuals. At least the State can point to some form of moral justification for occasionally opening letters or for tapping or bugging. But there are no circumstances in which I regard tapping or bugging by private investigators or by a private individual as being anything other than immoral and illegal. This is not paranoia.
For better or for worse, we may be 10 years behind the United States, but the intelligence industry has taken root and is thriving on both sides of the Atlantic. Unless curbed by this or other legislation, the cancer will grow, with dangerous consequences.
9.30 pm
The title of a book published in America, but available here, is:
The Big Brother Game—Bugging, Wiretapping, Tailing, Optical and Electronic Surveillance, Surreptitious Entry—How to Stop It or Do It Back.
Surveillance is becoming more sophisticated. I am not only not talking about top level technology—lasers and microprocessors. Tapping is not always carried out by a guy 50 yards away in a car. It can be carried out by someone in a hotel room in San Francisco through an infinity transmitter. How can legislation cover a guy in San Francisco listening to a conversation here? Without even the telephone being lifted, a conservation within 30 feet of the instrument can be heard many thousands of miles away.
The penalties are derisory. Even with the increased penalties proposed by the amendment, the risk might be worth taking in industrial espionage in order to steal a major company's secrets. When millions of pounds are involved, someone may be prepared to risk a spell in gaol or a fine of a few thousand pounds. The amended clause 47 is a considerable advance. Although amendment No. 54 does not go far enough, I am pleased with it. I hope that the Back Benches will find the enthusiasm to support it.
A further deficiency is the inability of the House to establish a viable system of parliamentary accountability, as my hon. Friend the Member for Keighley said. I regret

that little progress is being made over the warrant application procedures. There are shortcomings even with the amendments, but we are moving in the right direction.

Mr. Cryer: The Birkett report of over two decades ago on the authorisation of warrants, and the minority report of Patrick Gordon Walker, who could not be regarded as an outrageous radical, suggested that each warrant application should be by way of an affidavit of the officer concerned. Even that modest proposal, as an additional safeguard to ensure that State interception is scrupulously carried out, is not countenanced by the Government and is not included in the amendments.

Mr. George: I welcome my hon. Friend's intervention. I hope that, as a result of the lengthy debate, amendments may be introduced in another place.
I have reached my conclusions on tapping and bugging not by membership of the Committee but through my long interest in controlling the private security industry. This is not a time to criticise the Home Secretary's perspective on the industry, but one way partly to deal with the problem is to increase fines. A second way is to institute a system of public regulation, so that private investigators who indulge in tapping and bugging have their licences revoked. They are interfering with the rights and privacy of others.
I very much hope that those hon. Members who are present will support the amendments. I regret that it is often the case in debates of this kind—I believe that this is the experience of many hon. Members—that it is those who have not heard the debate and who have not been convinced by the arguments who will eventually determine the outcome. I believe that the manner in which the issue has been articulated and the considerable public outcry that has occurred must convince the Home Secretary, as it did not convince his predecessor, that the time has come for much tougher legislation. I hope that the Home Secretary will consider introducing further legislation to strengthen the defences of society against illicit tapping and bugging. I suggest to the right hon. Gentleman and to my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) that one way of accomplishing our objective would be stricter licensing of the private security industry.

Mr. Deputy Speaker (Mr. Bernard Weatherill): The Question is, That the clause be read a Second time—

Mr. Cryer: On a point of order, Mr. Deputy Speaker. Hon. Members on both sides have raised important points specifically directed at the Home Secretary. I think that the House will be extremely disappointed if the Home Secretary fails to reply. II believe that the right hon. Gentleman has a duty to the House. I appreciate that he has already spoken. However, many hon. Members have expressed some criticisms during what I think has been the first major debate on this subject in the history of the House. The Home Secretary has a duty to make a responsible reply to the House.

Mr. Deputy Speaker: The Chair has no authority to persuade an hon. Member to speak or to dissuade him from speaking.

Question put, That the clause be read a Second time:—

The House divided: Ayes 224, Noes 284.

Division No. 133]
[9.35 pm


AYES


Adams, Allen
Fraser, J. (Lamb'th, N'w'd)


Aitken, Jonathan
Freeson, Rt Hon Reginald


Allaun, Frank
Freud, Clement


Alton, David
Garrett, John (Norwich S)


Anderson, Donald
Garrett, W. E. (Wallsend)


Archer, Rt Hon Peter
George, Bruce


Ashton, Joe
Gilbert, Rt Hon Dr John


Atkinson, N.(H'gey,)
Ginsburg, David


Barnett, Guy (Greenwich)
Golding, John


Barnett, Rt Hon Joel (H'wd)
Gorst, John


Beith, A. J.
Gourlay, Harry


Benn, Rt Hon A. Wedgwood
Graham, Ted


Bennett, Andrew(St'kp't N)
Grant, George (Morpeth)


Bidwell, Sydney
Grant, John (Islington C)


Booth, Rt Hon Albert
Hamilton, James (Bothwell)


Boothroyd, Miss Betty
Hamilton, W. W. (C'tral Fife)


Bottomley, Rt Hon A.(M'b'ro)
Hardy, Peter


Bradley, Tom
Harrison, Rt Hon Walter


Bray, Dr Jeremy
Hart, Rt Hon Dame Judith


Brocklebank-Fowler, C.
Hattersley, Rt Hon Roy


Brown, Hugh D. (Provan)
Haynes, Frank


Brown, R. C. (N'castle W)
Hogg, N. (E Dunb't'nshire)


Brown, Ron (E'burgh, Leith)
Holland, S. (L'b'th, Vauxh'll)


Brown, Ronald W. (H'ckn'yS)
Home Robertson, John


Callaghan, Jim (Midd't'n &amp; P)
Homewood, William


Campbell, Ian
Hooley, Frank


Campbell-Savours, Dale
Huckfield, Les


Cant, R. B.
Hudson Davies, Gwilym E.


Carmichael, Neil
Hughes, Mark (Durham)


Cartwright, John
Hughes, Robert (Aberdeen N)


Clark, Dr David (S Shields)
Hughes, Roy (Newport)


Cocks, Rt Hon M. (B'stol S)
Irving, Charles (Cheltenham)


Coleman, Donald
Janner, Hon Greville


Cook, Robin F.
Jay, Rt Hon Douglas


Cowans, Harry
John, Brynmor


Cox, T. (W'dsw'th, Toot'g)
Johnson, James (Hull West)


Crawshaw, Richard
Johnston, Russell (Inverness)


Crowther, J. S.
Jones, Barry (East Flint)


Cryer, Bob
Jones, Dan (Burnley)


Cunliffe, Lawrence
Kilroy-Silk, Robert


Cunningham, Dr J. (W'h'n)
Lamond, James


Dalyell, Tam
Leadbitter, Ted


Davidson, Arthur
Leighton, Ronald


Davies, Rt Hon Denzil (L'lli)
Lewis, Arthur (N'ham NW)


Davies, Ifor (Gower)
Lewis, Ron (Carlisle)


Davis, T. (B'ham, Stechf'd)
Litherland, Robert


Deakins, Eric
Lofthouse, Geoffrey


Dean, Joseph (Leeds West)
Lyons, Edward (Bradf'd W)


Dempsey, James
Mabon, Rt Hon Dr J. Dickson


Dewar, Donald
McCartney, Hugh


Dixon, Donald
McDonald, Dr Oonagh


Dobson, Frank
McElhone, Frank


Dormand, Jack
McGuire, Michael (Ince)


Douglas, Dick
McKelvey, William


Dubs, Alfred
MacKenzie, Rt Hon Gregor


Duffy, A. E. P.
McNally, Thomas


Dunnett, Jack
McNamara, Kevin


Dunwoody, Hon Mrs G.
McTaggart, Robert


Eadie, Alex
McWilliam, John


Eastham, Ken
Magee, Bryan


Edwards, R. (W'hampt'n S E)
Marshall, Dr Edmund (Goole)


Ellis, R. (NE D'bysh're)
Marshall, Jim (Leicester S)


Ellis, Tom (Wrexham)
Martin, M (G'gow S'burn)


English, Michael
Maxton, John


Ennals, Rt Hon David
Mellish, Rt Hon Robert


Evans, Ioan (Aberdare)
Mikardo, Ian


Evans, John (Newton)
Millan, Rt Hon Bruce


Field, Frank
Mitchell, Austin (Grimsby)


Fitch, Alan
Morris, Rt Hon C. (O'shaw)


Fitt, Gerard
Morris, Rt Hon J. (Aberavon)


Flannery, Martin
Morton, George


Fletcher, Raymond (Ilkeston)
Moyle, Rt Hon Roland


Fletcher, Ted (Darlington)
Oakes, Rt Hon Gordon


Foot, Rt Hon Michael
Ogden, Eric


Ford, Ben
O'Halloran, Michael


Forrester, John
O'Neill, Martin


Foster, Derek
Orme, Rt Hon Stanley


Foulkes, George
Parker, John





Pavitt, Laurie
Strang, Gavin


Pendry, Tom
Straw, Jack


Penhaligon, David
Summerskill, Hon Dr Shirley


Powell, Raymond (Ogmore)
Thomas, Dafydd (Merioneth)


Price, C. (Lewisham W)
Thomas, Jeffrey (Abertillery)


Race, Reg
Thomas, Mike (Newcastle E)


Rees, Rt Hon M (Leeds S)
Thomas, Dr R.(Carmarthen)


Richardson, Jo
Thorne, Stan (Preston South)


Roberts, Albert (Normanton)
Tilley, John


Roberts, Allan (Bootle)
Tinn, James


Roberts, Ernest (Hackney N)
Urwin, Rt Hon Tom


Roberts, Gwilym (Cannock)
Varley, Rt Hon Eric G.


Robertson, George
Wainwright, R. (Colne V)


Robinson, G. (Coventry NW)
Walker, Rt Hon H. (D'caster)


Rodgers, Rt Hon William
Watkins, David


Rooker, J. W.
Weetch, Ken


Roper, John
Welsh, Michael


Ross, Ernest (Dundee West)
White, J. (G'gow Pollok)


Rowlands, Ted
Whitehead, Phillip


Ryman, John
Whitlock, William


Sandelson, Neville
Wigley, Dafydd


Sheerman, Barry
Willey, Rt Hon Frederick


Sheldon, Rt Hon R.
Williams, Rt Hon A. (S'sea W)


Shore, Rt Hon Peter
Williams, Sir J. (W'ton)


Short, Mrs Renée
Wilson, Gordon (Dundee E)


Silkin, Rt Hon J. (Deptford)
Wilson, Rt Hon Sir H. (H'ton)


Silverman, Julius
Wilson, William (C'try SE)


Skinner, Dennis
Winnick, David


Snape, Peter
Woodall, Alec


Soley, Clive
Woolmer, Kenneth


Spearing, Nigel
Wright, Sheila


Spriggs, Leslie
Young, David (Bolton E)


Stallard, A. W.



Stewart, Rt Hon D. (W Isles)
Tellers for the Ayes:


Stoddart, David
Mr. Frank R. White and Mr. Allen McKay 


Stott, Roger





NOES


Adley, Robert
Butcher, John


Alexander, Richard
Cadbury, Jocelyn


Alison, Michael
Carlisle, John (Luton West)


Amery, Rt Hon Julian
Carlisle, Kenneth (Lincoln)


Ancram, Michael
Chalker, Mrs. Lynda


Arnold, Tom
Channon, Rt. Hon. Paul


Aspinwall, Jack
Chapman, Sydney


Atkins, Rt Hon H. (S'thorne)
Churchill, W. S.


Atkins, Robert(Preston N)
Clark, Hon A. (Plym'th, S'n)


Atkinson, David (B'm'th,E)
Clark, Sir W. (Croydon S)


Baker, Kenneth(St.M'bone)
Clarke, Kenneth (Rushcliffe)


Baker, Nicholas (N Dorset)
Clegg, Sir Walter


Banks, Robert
Cockeram, Eric


Beaumont-Dark, Anthony
Corrie, John


Bell, Sir Ronald
Costain, Sir Albert


Bendall, Vivian
Cranborne, Viscount


Bennett, Sir Frederic (T'bay)
Critchley, Julian


Benyon, Thomas (A'don)
Crouch, David


Benyon, W. (Buckingham)
Dean, Paul (North Somerset)


Best, Keith
Dorrell, Stephen


Bevan, David Gilroy
Douglas-Hamilton, Lord J.


Biffen, Rt Hon John
Dover, Denshore


Biggs-Davison, John
du Cann, Rt Hon Edward


Blackburn, John
Dunn, Robert (Dartford)


Bonsor, Sir Nicholas
Durant, Tony


Boscawen, Hon Robert
Dykes, Hugh


Bottomley, Peter (W'wich W)
Eden, Rt Hon Sir John


Bowden, Andrew
Eggar, Tim


Boyson, Dr Rhodes
Fairbairn, Nicholas


Braine, Sir Bernard
Fairgrieve, Russell


Bright, Graham
Faith, Mrs Sheila


Brinton, Tim
Farr, John


Brittan, Leon
Fenner, Mrs Peggy


Brooke, Hon Peter
Finsberg, Geoffrey


Brotherton, Michael
Fisher, Sir Nigel


Brown, Michael (Brigg &amp; Sc'n)
Fletcher, A. (Ed'nb'gh N)


Browne, John (Winchester)
Fletcher-Cooke, Sir Charles


Bruce-Gardyne, John
Fookes, Miss Janet


Bryan, Sir Paul
Forman, Nigel


Budgen, Nick
Fowler, Rt Hon Norman


Bulmer, Esmond
Fox, Marcus


Burden, Sir Frederick
Fraser, Rt Hon Sir Hugh






Fraser, Peter (South Angus)
Mates, Michael


Fry, Peter
Maude, Rt Hon Sir Angus


Gardiner, George (Reigate)
Mawby, Ray


Gardner, Edward (S Fylde)
Mawhinney, Dr Brian


Garel-Jones, Tristan
Maxwell-Hyslop, Robin


Gilmour, Fit Hon Sir Ian
Mayhew, Patrick


Glyn, Dr Alan
Mellor, David


Gow, Ian
Meyer, Sir Anthony


Gower, Sir Raymond
Miller, Hal (B'grove)


Grant, Anthony (Harrow C)
Mills, Iain (Meriden)


Gray, Hamish
Mills, Peter (West Devon)


Greenway, Harry
Miscampbell, Norman


Grieve, Percy
Moate, Roger


Griffiths, B. (B'y St. Edm'ds)
Molyneaux, James


Griffiths, Peter Portsm'th N)
Monro, Hector


Grist, Ian
Montgomery, Fergus


Grylls, Michael
Moore, John


Gummer, John Selwyn
Morgan, Geraint


Hamilton, Hon A.
Morris, M. (N'hampton S)


Hamilton, Michael (Salisbury)
Morrison, Hon C. (Devizes)


Hampson, Dr Keith
Morrison, Hon P. (Chester)


Hannam, John
Mudd, David


Haselhurst, Alan
Murphy, Christopher


Hastings, Stephen
Neale, Gerrard


Havers, Rt Hon Sir Michael
Needham, Richard


Hawkins, Paul
Nelson, Anthony


Hawksley, Warren
Neubert, Michael


Hayhoe, Barney
Newton, Tony


Heddle, John
Onslow, Cranley


Henderson, Barry
Oppenheim, Rt Hon Mrs S.


Heseltine, Rt Hon Michael
Osborn, John


Hicks, Robert
Page, Rt Hon Sir G. (Crosby)


Hill, James
Page, Richard (SW Herts)


Hogg, Hon Douglas (Gr'th'm)
Parris, Matthew


Holland, Philip (Carlton)
Patten, Christopher (Bath)


Hooson, Tom
Pawsey, James


Hordern, Peter
Percival, Sir Ian


Howell, Rt Hon D. (G'ldf'd)
Pink, R. Bonner


Howell, Ralph (N Norfolk)
Pollock, Alexander


Hunt, David (Wirral)
Porter, Barry


Jenkin, Rt Hon Patrick
Powell, Rt Hon J.E. (S Down)


Jessel, Toby
Prentice, Rt Hon Reg


Jopling, Rt Hon Michael
Price, Sir David (Eastleigh)


Joseph, Rt Hon Sir Keith
Proctor, K. Harvey


Kaberry, Sir Donald
Pym, Rt Hon Francis


Kellett-Bowman, Mrs Elaine
Raison, Timothy


Kershaw, Anthony
Rees-Davies, W. R.


Kimball, Marcus
Renton, Tim


King, Rt Hon Tom
Rhodes James, Robert


Knight, Mrs Jill
Rhys Williams, Sir Brandon


Knox, David
Ridley, Hon Nicholas


Lamont, Norman
Rifkind, Malcolm


Lang, Ian
Rippon, Rt Hon Geoffrey


Langford-Holt, Sir John
Roberts, Wyn (Conway)


Latham, Michael
Ross, Wm. (Londonderry)


Lawrence, Ivan
Rossi, Hugh


Lawson, Rt Hon Nigel
Royle, Sir Anthony


Lee, John
Sainsbury, Hon Timothy


Le Marchant, Spencer
St. John-Stevas, Rt Hon N.


Lennox-Boyd, Hon Mark
Scott, Nicholas


Lester, Jim (Beeston)
Shaw, Giles (Pudsey)


Lewis, Kenneth (Rutland)
Shelton, William (Streatham)


Lloyd, Ian (Havant &amp; W'loo)
Shepherd, Colin (Hereford)


Loveridge, John
Shepherd, Richard


Luce, Richard
Shersby, Michael


Lyell, Nicholas
Silvester, Fred


McCusker, H.
Sims, Roger


Macfarlane, Neil
Skeet, T. H. H.


MacGregor, John
Smith, Dudley


MacKay, John (Argyll)
Speed, Keith


Macmillan, Rt Hon M.
Speller, Tony


McNair-Wilson, M. (N'bury)
Spicer, Jim (West Dorset)


McNair-Wilson, P. (New F'st)
Spicer, Michael (S Worcs)


McQuarrie, Albert
Sproat, Iain


Madel, David
Stainton, Keith


Major, John
Stanbrook, Ivor


Marland, Paul
Stanley, John


Marlow, Tony
Steen, Anthony


Marshall, Michael (Arundel)
Stevens, Martin


Marten, Neil (Banbury)
Stewart, Ian (Hitchin)





Stewart, A. (E Renfrewshire)
Waller, Gary


Stokes, John
Ward, John


Stradling Thomas, J.
Warren, Kenneth


Taylor, Robert (Croydon NW)
Watson, John


Taylor, Teddy (S'end E)
Wells, John (Maidstone)


Tebbit, Norman
Wells, Bowen


Temple-Morris, Peter
Wheeler, John


Thatcher, Rt Hon Mrs M.
Whitelaw, Rt Hon William


Thomas, Rt Hon Peter
Whitney, Raymond


Thompson, Donald
Wickenden, Keith


Thornton, Malcolm
Wiggin, Jerry


Townend, John (Bridlington)
Wilkinson, John


Townsend, Cyril D, (B'heath)
Williams, D.(Montgomery)


Trippier, David
Winterton, Nicholas


Trotter, Neville
Wolfson, Mark


van Straubenzee, W. R.
Young, Sir George (Acton)


Vaughan, Dr Gerard
Younger, Rt Hon George


Viggers, Peter



Waddington, David
Tellers for the Noes


Waldegrave, Hon William
Mr. Carol Mather and Mr. Alastair Goodlad 


Walker, B. (Perth)



Walker-Smith, Rt Hon Sir D.

Question accordingly negatived.

Mr. Deputy Speaker: If a vote is desired on amendment No. 54 it will be taken when we reach the amendment on the Amendment Paper.

Clause 2

POWERS OF THE CORPORATION

Mr. Golding: I beg to move amendment No. 2 in page 3, leave out lines 31 to 35.

Mr. Deputy Speaker: With this, we may take the following amendments: No. 3, in page 4, leave out lines 1 to 8.
No. 4, in page 4 leave out lines 9 to 17.

Mr. Golding: A vote will be required on amendment No. 54. It is a relief to turn back to the Bill and the conditions of employment of Post Office engineers. I speak for the POEU, of which I am a sponsored Member and assistant secretary. We are totally against the creation of joint ventures. That is why the amendments would delete subsections (3)(d) and (3)(g). The amendments would ensure that the Post Office would not have the authority to enter into joint ventures.
I am concerned about the security of employment of Post Office engineers. Since 1919, job security for those engineers has been an essential part of their conditions of service. Many engineers have, in their view, accepted worse pay and conditions because of the security of employment that they enjoy. To a great extent that security has been based on the fact that they have been able to take advantage of the development and expansion of telecommunications and the Post Office's monoply in telecommunications.
Post Office engineers who have enjoyed that security of employment see it as threatened by the Bill. I have said previously that they are already threatened by technological change, and they also feel threatened by changes in methods of work. Over the years, the POEU has preached and practised productivity bargaining. The Post Office and the community have benefited from that attitude, but it has been advocated only because of the background of security of employment.
Like me, the Post Office engineers for whom I speak see that any move towards joint ventures by BT must threaten their jobs. They see the provision for joint


ventures as a device which the government have latched on to in order to solve some of the problems of providing sufficient investment for BT.
The argument in the forefront of Ministers' minds is that joint ventures can provide much-needed cash to enable BT to expand and may provide marketing experience. I must admit that BT's approach to the sale and marketing of its services has been lacking.
It is not worth while to threaten the security of employment of Post Office engineers for these reasons. It is wrong for the Government to seek to solve the problem of the cash limits imposed upon British Telecom by resort to joint ventures. Post Office and British Telecom investment should be taken from the public sector borrowing requirement debt, and there should be complete freedom for British Telecom to borrow and invest for itself. It will be harmful to British Telecom to have to go into joint ventures to raise the finance to expand. This argument is partly irrelevant because investment capital in British Telecom is needed to expand the network of which it keeps the monopoly.
When British Telecom develops activities which can be profitable it is wrong that it should be forced to share the profit with private industry just because it is denied the wherewithal to develop those activities. Private industry is to be allowed to take advantage of vast public investment, and the skill of Post Office engineers, particularly in research and development. We know that private enterprise will take part in a joint venture only if it looks like being successful. The Government are saying that they will make it possible for private industry to back the winners found by British Telecom. It is unlikely that British Telecom will find backers for the losers and it will be forced, through the cash limits, to go into joint ventures to finance its own developments.
This is an important subject for all Post Office engineers, and I hope that the Government will think again about their proposals for financing British Telecom. Ministers must do everything possible to remove job insecurity. In the magnificent, successful lobby in Central Hall the point most emphasised by rank and file members of Post Office unions was the threat to job security. The more the Government do to remove that insecurity, the better it will be.
I strongly believe that we are far more likely to develop resources fully if they are under public ownership that if they are partly in private enterprise and partly in public corporations. Between the two some will get lost. I see that Government Members have arrived from the Smoking Room. I hope that they will take the debate as seriously as people who earn their living in British Telecom and the Post Office.

Mr. Gregor MacKenzie: I wish to ask the Minister a number of questions.

It being Ten O'clock, the debate stood adjourned.

Ordered,
That, at this day's sitting, the British Telecommunications Bill may be proceeded with, though opposed, until any hour.—[Le Marchant.]

Question again proposed, That the amendment be made.

Mr. MacKenzie: I can think of no good reason why British Telecommunications would seek these powers. I cannot think of any time when British

Telecommunications would voluntarily use them. It would be helpful if the Minister could give us a few concrete examples of the possibilities. We should like to know whether he thinks that the joint ventures will come into being and whether he has been told by the chairman and members of the board, which is yet to be set up, that they would like them to. I fear that if the Minister is not able to give a few concrete examples the suspicions of telecommunications workers, which were voiced by many who came to London today, will remain.
Having heard the Minister and the Secretary of State on numerous occasions, I suspect that the Government intend to encourage joint ventures. According to some of the public utterances by Ministers, the Government's intention is to force the British Telecommunications Corporation to set up joint ventures. Despite pledges that there shall be little inerference with nationalised industries and that they should be allowed to take commercial judgements, the Government might choose to force the scheme on British Telecommunications. They could do that by setting stingy cash limits for the corporation that will require it to find the money elsewhere. Ministers have said that the finance required for capital expenditure must be raised in such a way that little of it will count against the PSBR.
I am thrown into confusion. I understand that there can be no joint ventures in the basic network. Clause 4 precludes that. There is a contradiction.
During discussion in Committee the Minister said that there was a need for further investment in British Telecommunications. We support him 100 per cent. in that. We believe that there should be a massive investment in British Telecommunications. Much of that investment should be used to modernise and upgrade the basic network. I do not think that the setting up of joint ventures can help us to improve, modernise or upgrade the existing basic network. That is one of our fears.
The other fear, as my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) said, is that a great many people who have worked for British Telecom and have done so very loyally for many years feel that this is some sort of halfway house towards hiving off the particularly profitable parts of the present operation.

Mr. Biggs-Davison: rose—

Mr. MacKenzie: Does the hon. Gentleman want to intervene? If he wants to make a contribution, we shall listen to him with great care. I know that he will bring his great expertise to bear on our deliberations.

Mr. Biggs-Davison: I am grateful to the right hon. Gentleman for giving way. I am surprised, when he is speaking so constructively about this matter, that he should close his mind completely to any change or experimentation. I should have thought that we ought to give ventures of this kind a chance.

Mr. MacKenzie: We are all for experimentation and change in British Telecommunications. I commend to the hon. Gentleman the annual report of British Telecommunications. If he reads it, he will find that it is a highly successful and innovative body. Indeed, the Minister of State will no doubt tell him, if he chooses to ask him, that on Second Reading he personally gave great praise to the innovation within British


Telecommunications. It is something, I think, of which we are all very proud, and we have no less an authority than the Minister of State for saying so.
I was on the point of saying that a great many people fear that this is a halfway house to further hiving off. We shall come to that later in our deliberations.
British Telecommunications' activities and successes are largely due to the fact that over many years people of talent and considerable skill have given great loyalty to the Post Office telecommunications branch. They have worked very hard at their jobs. In research and development they have produced many new ideas, and I think that these people are entitled to be assured of their future. This has caused them, of course, a great deal of uncertainty.
We are all conscious of the fact that over many years a great deal of taxpayers' money has gone into the Post Office. We have been amply rewarded, since the telecommunications side has always shown a considerable profit.
We have to concern ourselves with two things; the future of the staff, and what investment we are to see in the future. I cannot see that joint ventures are eagerly sought by British Telecommunications. I cannot see that they will necessarily improve the lot of consumers in these important projects, and I cannot see that they will in any way improve the position of the staff. I can only fear that this will mean a reduction in the revenue of the British Telecommunications Corporation, and that can only mean that at the end of the day we shall all have to pay a great deal more for the services already provided.
I hope that the Minister can reassure us on some of the points which we have made.

Mr. Michael Marshall: This has been an interesting rerun of some of the arguments that we had in Standing Committee. I listened tonight with a certain amount of surprise to the latest twist in the story because there seems to be a certain shift of ground on these matters. I thought in Standing Committee that we had seen from the Opposition a certain amount of constructive thinking about ways to provide additional opportunities for British Telecommunications, and one of those was the matter of joint ventures.
The hon. Member for Newcastle-under-Lyme (Mr. Golding) spent a good deal of time talking about security of employment, and it seemed to me that the thoroughly inward-looking and backward view that he was arguing, assisted by the right hon. Member for Rutherglen (Mr. MacKenzie), was one that would reduce security of employment because the kind of joint ventures that we have in mind would give greater scope to British Telecommunications and would allow it to explore new markets. When the hon. Gentleman, with his usual sense of balance, developed some of the more relevant arguments he made our case. There is really no need for

me to reply. The hon. Gentleman said that British Telecommunications wants to get additional marketing expertise. He accepted the argument about additional capital although he argued that he would like to see that secured outside the public sector borrowing requirement. He observed that we are in an era of high technological change. He argued that those who will come in from the private sector will be interested only in successful companies. Why should successful companies not be set up by BT and the private sector?
The right hon. Member for Rutherglen asked for concrete examples. He knows that BT is not yet free to move in these areas because until the Bill is enacted the provisions that we are discussing do not take force. In the meantime, the normal commercial processes will continue. The right hon. Gentleman asked for examples, but the proposed practice is already being followed. He will be aware of the work that has gone on with system X. He will know about the BTS organisation, involving the four largest private sector manufacturers in the country, and BT selling system X around the world. He will know about Prestel, which is a joint venture between BT and the private sector, which is now being given further direct assistance in the United States through a joint venture which will be supported by my hon. Friend the Minister for Industry and Information Technology when he visits the United States shortly. My hon. Friend will attend important occasions at which the promotion of Prestel may be pursued. This is the type of joint venture that we have in mind.
On Second Reading my right hon. Friend the Secretary of State made it plain what we have in mind. He said:
We need a strong and successful British Telecommunications not only competing with the private sector but co-operating with it in joint ventures … We hope to see BT co-operating with the private sector in, for example, providing auxiliary services which depend on the telecommunications network and attracting private capital into subsidiaries set up to market subscribers' apparatus. Provided that BT is not in control of any partnership … financing can be conducted outside the PSBR and … in addition to the … investment programme of which I have spoken."—[Official Report, 2 December 1980; Vol 995, c. 208.]
We are speaking of opportunities to find additional capital, opportunities to move into high technology and opportunities to tap marketing skills that are outside BT. I have quoted some specific examples, but the right hon. Member for Rutherglen will appreciate that because of commercial confidentiality I cannot refer to current negotiations. He would not expect me to do so. There is no reason why there should not be considerable scope in these areas. That will provide additional employment for those who work in BT and outside. We shall return to the issue of wider financing outside the PSBR.
I urge Labour Members to think again. It appears that what they are urging is backward and not in the best interests of BT.

Question put and negatived.

Clause 4

REDISTRIBUTION OF FUNCTIONS AMONG WHOLLY OWNED SUBSIDIARIES

Mr. Kenneth Baker: I beg to move amendment No. 100, in page 6, line 44, leave out from beginning to end of line 3 on page 7.

Mr. Deputy Speaker: With this it will be convenient to take amendment No. 6, in page 6, line 45, after `directions', insert
'which shall be reported to the House of Commons.',
and the following Government amendments: Nos. 101 to 107, 115 to 119, 122 and 123.

Mr. Baker: This is a complicated set of amendments but I think that what it will achieve will be welcomed on both sides of the House. The purpose of the amendments is to require the Secretary of State to lay before Parliament all directions requiring British Telecom either to create subsidiaries or to dispose of assets. The issue was debated at some length in Committee. I gave undertakings to consider the parliamentary procedures that would be appropriate when the Secretary of State used these powers.
10.15 pm
However, there are two exclusions. The first is where publication would be against the interests of national security. That is already in the Bill and in the 1969 Act. The second is where the laying before Parliament would affect adversely someone's commercial interest. Because of the detail of the exclusions, counsel has advised that the power to direct the creation of subsidiaries should be moved from clause 4 to clause 6, in the same subsection as disposals. That means that the exclusions have to be repeated only once.
Therefore, amendments Nos. 100 and 101 move the Secretary of State's power of direction to create subsidiaries from clause 4(5) to clause 6(6). The requirement that any direction should not impede the discharge of BT's duty applies only to the power to direct disposals, which is contained in amendment No. 102.
Amendment No. 103 requires directions under clause 6(6) to be laid before Parliament unless to do so would be against the interests of national security or anyone's commercial interests.

Mr. Orme: Will the hon. Gentleman explain what "commercial interests" of any person means? The Minister is asking for power to lay before the House a copy of each direction, but that is not an affirmative order or a statutory instrument. It is purely an obligation to lay before the House a direction in a certain regard. The proposed new subsection (6A) (a) and (b) mentions
The interests of national security; or the commercial interests of any person".
That could be widely interpreted. Will the Minister explain more fully how wide the Secretary of State would want to go?

Mr. Baker: The Secretary of State may use either of those powers. I should have thought that that would be an unusual circumstance, because we are discussing the Secretary of State's power to direct the creation of subsidiaries and his power to direct the disposal of assets. As I said in Committee, I consider that those are reserved powers and that they will not be used widely. The purpose

of the amendments is to ensure that when the powers are used the House of Commons will be informed, so that it knows that the Secretary of State is using his power in that way. Later directions will be published in the annual report.
We thought it prudent that in both cases we should have a backstop—for example, the possibility that in such a situation the commercial interests of the corporation or one of the possible partners would be affected. I cannot think up hypothetical cases, but I shall look upon them as a backstop.
We would not want to publish anything which would harm a negotiation or discussion which might be confidential to the Post Office or to British Telecommunications. The later amendments refer to that.
Amendment No. 105 requires BT not to disclose a direction under clause 6(6) which the Secretary of State has not laid before Parliament. It would be anomalous if the Secretary of State decided that a direction could not be laid before Parliament and BT promptly disclosed it. If either of those two powers is used it will become widely known in the corporation and possibly outside. It is only appropriate and right that the House should know at the same time, because the matter may be of interest to hon. Members, who may wish to make an issue of it. If we published those facts in the annual report, that might be three months, six months or a year after the event.
Amendment No. 106 requires BT to include in the annual report all directions given to it under the Bill, and not only those under section 6 as at present. Amendments Nos. 115 to 122 do the same for the Post Office.
These amendments are in response to the points made to me in Committee. I am glad to be able to present them. It is entirely appropriate to inform Parliament of the use of these powers, because Parliament will then know when they are being used. As I have said, I think that they will be used sparingly, but at least the House will have the opportunity to debate them.

Mr. Golding: I have often experienced disappointment at the racecourse after thinking that my horse had crossed the line first. That sort of experience came back to me when I saw the amendments. I noticed that the Secretary of State had added his name to the amendment tabled by myself and my hon. Friend the Member for Bethnal Green and Bow (Mr.Mikado), which is designed to delete the right hon. Gentleman's power to give directions to British Telecommunications to create subsidiaries.
I was heartened by that. I thought that the Government had accepted the argument—which we strongly urged in Committee—that the Secretary of State was taking upon himself greater powers than any previous Secretary of State to interfere in the running of the public corporations.
When I saw that the Secretary of State had added his name to our amendment I thought that at last he was taking notice of the Conservative Party manifesto, which promised less interference in the day-to-day running of the nationalised industries. It was a moment of great pleasure when I saw that. However, it was pointed out to me that what the Government had taken away from clause 4 they had added to clause 6. As a result, my hope that the Secretary of State would not take such wide powers was dashed to the ground.
It is wrong for the right hon. Gentleman to take these powers to force upon British Telecommunications subsidiaries that it does not want. I do not want British


Telecommunications to have any subsidiaries at all. I do not wish to see it operate in that way. Above all, I do not want the Secretary of State to force upon British Telecommunications subsidiaries which, in its commercial wisdom, it has decided would be damaging to the corporation's business. It does not make sense for a Secretary of State to have fought on an election manifesto which says "We will interfere less in the day-to-day running of the nationalised industries" but to take to himself when in office the power to interfere in that way.
I understand the Government's argument. They are saying that if we open up this work to competition, the competition must contain no cross-subsidisation—for example, between the part of British Telecommunications which enjoys a monopoly and the part which is in competition, and that that means the creation of subsidiaries.
That argument is nonsense. The management of British Telecommunications would have preferred to meet that situation by keeping separate accounts, without having to go through the rigmarole and bureaucracy of creating subsidiaries where none are required.
I should not have had no cross-subsidisation. I am convinced that cross-subsidisation will take place in American Telephone and Telegraph and Standard Telephones and Cables. Japanese companies and others will compete on the basis of cross-subsidising the telecommunications equipment with which they will flood this country. Cross-subsidisation will take place in private companies and perhaps in some foreign-owned public companies. We shall be asking BT to compete on unfair terms because it cannot cross-subsidise. Due to the Secretary of State's adherence to a particular ideology, it will have to create a bureaucratic orgnisation that it does not need.
I belive that the Secretary of State has gone along this road because in the case of ATT the Americans decided to liberalise, as the expression goes, in this way by the creation of subsidiaries. The Department of Industry and Ministers have therefore decided that they, too, will take that course. They have completely overlooked the difference between ATT and BT. ATT has subsidiaries which themselves can borrow on the open market. It has subsidiaries which depend upon the financial strength of the parent company. If that is not cross-subsidisation, I do not know what is. ATT has subsidiaries of the size of its manufacturing subsidiary, which is so powerful and financially independent that any comparison with BT must fall.
In Committee we asked a number of questions to which we have not yet received answers. I asked whether the Government would always prevent BT from cross-subsidising. I asked whether it would be possible for foreign competitors to be subsidised while BT could not. Those vital questions were brushed off by the Under-Secretary of State, who said that they could not be answered off the top of one's head. That depends upon the quality of the head. However, Ministers have now had time to find answers to those questions.
We also want to know what kind of subsidiaries the Government have it in mind to force upon BT. Rumours have been rife that the Government are thinking of forcing BT to have regional subsidiaries. I hope that that is naught but a pernicious rumour. As I said in Committee, it would be most damaging for BT to follow a course of regionalisation. It would be damaging to the rural areas

particularly those which at present need to receive a cross-subsidy from more concentrated industrial and commercial areas. Let the Government know this. There is a great deal of cross-subsidy in BT at present. If one is to provide a national service at common charges, inevitably there is cross-subsidisation. I hope that it will continue.
It is also possible to create functional subsidiaries. We consider that to be one step towards hiving off. They are one degree worse than joint ventures. If the Government find that a subsidiary is particularly profitable they will use the powers that they have given themselves to sell it off. The Government run short of cash so often that they have to look to the public sector for something to sell. That is a short-term and disastrous policy, particularly for British Telecommunications.
10.30 pm
The Secretary of State has given himself the power to dispose of assets. We strongly oppose that. In Committee, I referred to the Government's habit of turning up at a pawnshop on a Monday morning to sell more of their assets. They are always doing that. As a result of their economic policies, they find themselves in dire financial straits. They must raise more and more money to finance unemployment. They raise that money by selling off national assets. It is a disastrous policy, which the Post Office Engineering Union strongly opposes.
I hope that my right hon. and hon. Friends on the Opposition Front Bench will oppose this measure strongly and that when a Labour Government are returned to office they will do everything possible to ensure that those assets are returned.

Mr. Kenneth Baker: The hon. Member for Newcastle-under-Lyme (Mr. Golding) referred to the big rally that took place earlier in Central Hall. I cannot help feeling that members of the Post Office Engineering Union and of the Union of Communication Workers would have preferred to hear the debate of the past half hour, which has been pertinent to the Bill, instead of four hours of debate on telephone interception. It is a pity that so few union members seem to have stayed for this debate.
The hon. Gentleman spoke to clause 5. He objects to the Secretary of State's power to create subsidiaries or to direct British Telecommunications to create them. He said that such power was unprecedented, but he must know that that is not so. Such provisions appear in several Acts which set up or reorganise nationalised industries. I refer to the Gas Act 1972 and the Civil Aviation Act 1971, as well as to two provisions that were introduced by Labour Administrations—namely, section 45 of the Transport Act 1968 and section 4(2) of the Iron and Steel Act 1975.
I hope that the House does not believe that we seek to include unprecedented, extreme Right-wing measures in this part of the Bill. We do not. There is a good, healthy precedent, which has been followed by successive Governments, including that of which the hon. Gentleman was a member.
I turn to the substance of the debate and to the Secretary of State's power to instruct British Telecomunications to form a subsidiary. We have already made clear our policy in this respect. When British Telecommunications competes with the private sector, it is essential that it should make appropriate arm's length financial arrangements to ensure that it does not use its monopoly activities to subsidise areas in which it faces competition.
The representations that have been made to me by the private sector in the past few months express anxiety that British Telecommunications will be able to operate on an inside track with an established market base and with considerable control over the availability of attachment equipment of one sort or another.
Representations have also been made on the subject of cross-subsidisation. If there is to be cross-subsidisation, it is most important that it should be explicit. One should know whether there is cross-subsidisation. Often in the private sector it is known. In a group of companies with a variety of different subsidiaries, the strategy may be to use the profits of one company to invest in another, to help to make the second company more profitable. That is common, and it could be said to be a cross-subsidisation. However, the point is that the investors, the shareholders and the managers know what is happening, and, moreover, it cannot happen limitlessly, because they will have to face the market and the requirements of their cash resources.
With the Post Office, much of that sort of cross-subsidation could occur without anyone knowing about it and because of the substantial resources available to the Post Office it could continue for a long time.

Mr. Golding: I understand the argument, but why did not the Government tell British Telecom to keep separate accounts, to inform the Government and get separate authority? That would have been preferable to creating separate organisations which management regarded as unnecessary, bureaucratic and expensive to the business.

Mr. Baker: I doubt whether it would be expensive to the business, because I have indications that BT is responding vigorously to the opportunities that liberalisation will show up. I expect it to come to the Government with proposals to create subsidiaries, rather than the other way round. That is a forecast. I may be proved wrong, but I think that that is more likely to happen.
I do not think that the setting up of separate accountable units would necessarily achieve what one wants to achieve. The more obvious way to achieve it is to create separate subsidiaries. As the hon. Gentleman said, that is the method that has been adopted in America. It should be beneficial to BT and its customers to have individual profit centres, so that it can assess the viability of its various investments and decide whether to put resources into one investment as opposed to another. It would also be in the interests of employees, who would benefit from the success of these ventures.
I think that that is the right policy. It will give BT additional freedom, as well as encourage it to compete vigorously. Every indication that I have is that it wants to compete vigorously with the competition which it recognises will come.

Mr. Orme: What if that competition comes from foreign competitors, which might be privately owned firms but which are subsidised by their Governments in different ways, sometimes by hidden subsidies? How does BT stand up against that?

Mr. Baker: If the right hon. Gentleman will give me examples of large foreign companies that are subsidised by their respective Governments I shall be pleased to look into the matter.

Mr. Joseph Dean: What about coal?

Mr. Baker: I do not think that BT is likely to go into the coal business. [Interruption.] The right hon. Gentleman is raising wide considerations, much wider than the general competition that applies to Britain's industrial competitors right across the board and not to the competitiveness of one telecommunications company in Germany as opposed to one telecommunications company in Britain or America. But, if the right hon. Gentleman is saying that BT is likely to be faced with unfair competition from overseas, we shall be debating that on a later amendment on the hurdles that overseas companies will have to jump if they want to enter the new, liberalised market.

Mr. Golding: The best example is that of a public corporation coming into competition. There may in future be competition from the Soviet Union, which would involve cross-subsidisation. Many industries have had to meet competition from countries behind the Iron Curtain. The question cannot be evaded merely by saying that it is wide and hypothetical. We need the answer now.

Mr. Baker: We shall deal later with competition from overseas. Certain measures and proposals in the Bill will to a large extent allay the hon. Gentleman's anxiety. From what I know of the Soviet telecommunications industry, it will not be able to compete vigorously with the British, European or American industries.
I see no reason why the Secretary of State should not have the power to direct BT to create subsidiaries and to transfer property to them. I repeat that there are similar measures in many Acts concerning nationalised industries. I do not believe that it will be necessary to use the reserve power much, if at all, but it is important to have it for clarification of cross-subsidisation. I hope that BT will voluntarily use its power under clause 4 or clause 2 to do what is necessary. I do not envisage the Secretary of State using the power frequently, but I am absolutely convinced that it should be held in reserve.

Amendment agreed to.

Clause 5

CONTROL OF WHOLLY OWNED SUBSIDIARIES

Mr. Golding: I beg to move amendment No. 7, in page 7, line 34, at end insert—
'(2) As regards any wholly owned subsidiary the Corporation shall secure that notwithstanding anything in the subsidiary's Memorandum or Article of Association the subsidiary shall comply with the provisions of Schedule 1(2) to this Act.'.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this it will be convenient to take the following:
Government amendment No. 8.
Amendment No. 9, in page 8, line 18, at end insert—
'(4) As regards any wholly owned subsidiary of the Corporation, the Corporation shall secure that, notwithstanding anything in the subsidiary's Memorandum or Articles of Association, the employees of the subsidiary are employed at all times on terms and conditions of employment which, other than as to the identity of the employer, are the same as those of employees of the Corporation employed on like work.
An employee of a wholly owned subsidiary is to be regarded as employed on like work with an employee of the Corporation if their work is of the same or a broadly similar nature and the differences (if any) between the things they do are not of practical importance in relation to terms and conditions of employment; and accordingly in comparing their work regard should be had


to the frequency or otherwise with which any such differences occur in practice as well as to the nature and extent of the differences'.
Amendment No. 59, in clause 59, page 49, line 39, at end insert—
(2) As regards any wholly owned subsidiary the Post Office shall secure that notwithstanding anything in the subsidiary's Memorandum or Articles of Association the subsidiary shall comply with the provisions of Schedule 1(11) to the Post Office Act 1969'.
Government amendment No. 60.
Amendment No. 61, in clause 59, page 50, line 22, at end insert—
'(4) As regards any wholly owned subsidiary of the Post Office, the Post Office shall secure that, notwithstanding anything in the subsidiary's Memorandum or Articles of Association, the employees of the subsidiary are employed at all times on terms and conditions of employment which, other than as to the identity of the employer, are the same as those of employees of the Post Office employed on like work.
An employee of a wholly owned subsidiary is to be regarded as employed on like work with an employee of the Post Office if their work is of the same or a broadly similar nature and the differences (if any) between the things they do are not of practical importance in relation to terms and conditions of employment; and accordingly in comparing their work regard should be had to the frequency or otherwise with which any such differences occur in practice as well as to the nature and extent of the differences'.

Mr. Golding: I am pleased that the Government have partly met the amendment that I moved in Committee to ensure that the industrial relations provisions in schedule 1 are extended to subsidiaries. However, why is the wording different?
It appears that disputes in the main corporation will continue to go to the Post Office arbitration tribunal, but I am advised that under the Government amendment arbitration for employees in the subsidiaries will go to ACAS. I do not speak for the unions, but I do not believe that it is desirable for one body to arbitrate in the public corporation and another in the subsidiaries. I am neutral. I am not opposed to ACAS or the facilities that it provides. However, it could prove difficult for management and unions if employees of the corporation and employees of the subsidiaries have to take the same case to different tribunals.
I hope that the Minister will take advice. If my point is valid, I hope that the Government will sort it out in another place. The problem may have arisen inadvertently.
10.45 pm
I was pleased to see that the Government, in one respect, had met the spirit of what was requested by hon. Members in Committee. That is not true, however, of the request that was made about terms and conditions. We want a declaration from the Government on the result of discussions with the chairman designate on this matter. I put strongly in Committee, and do so again tonight, that it would be totally unacceptable to the Post Office Engineering Union if the terms and conditions of staff transferred to subsidiaries were different from those that would have been enjoyed in the main corporation. Enormous industrial relations difficulties would be created by the Government. I do not see how the unions can accept this situation. It will be seen as an industrial relations matter rather than a political one if the terms and conditions of members of staff are changed.
The Minister for Industry and Information Technology stated in Committee:

However, I undertake to look at the matter, as I have undertaken for the other amendment, because it is clearly our intention that if employees of the Post Office are moved to subsidiaries, their terms and conditions of work will remain the same.
I hope that the Minister sticks by those words. The important words are "remain the same" rather than the same as at the moment of transfer.
In Committee the Minister referred to the protection of schedule 1. Do the Government still believe that schedule 1 will protect members of the staff in subsidiaries? Will their terms and conditions remain similar to those that they would have enjoyed had they stayed in the main corporation?
The Minister referred to the EEC fifth directive. Had the Bill not come before the House today I would have been accompanying my colleagues on the Select Committee on Employment to Bonn and Brussels, where they are studying the fifth directive. I say that not only to indicate the sacrifice that I have made, especially when. I have seen one of my oldest friends, whom I shall only call "Ernie", being thrown out of the Gallery when sorely provoked by the Minister, but also because I have examined the fifth directive in more detail and more carefully than I had done when it emerged out of the blue in Committee. I cannot see that the directive will provide protection for our members in the subsidiaries for any period. It may provide, as in schedule 1 and as in the Employment Protection Act, protection at the moment of transfer. Nowhere does it provide protection for the years to come, yet that is the important question.
Nobody in his right mind would think that the chairman of British Telecom had forced our members to take different pay and conditions of service now, but the question asked by our membership is "What will happen through time?" We do not want there to be different pay and conditions in the subsidiaries.
If the subsidiaries exist to provide a system of accounting, to make certain that there is no unfair competition, no cross-subsidisation, I say to the Minister "Leave it there. Do not go further and say that they are separate entities in which the staff must have a different regime. If you do, there will be great difficulties."
I am convinced that it would be thoroughly disadvantageous for British Telecom to have a different system of payment—a different set of conditions—as between one subsidiary and another and as between the subsidiaries and the corporation. It would introduce some of the worst features of British industry in the form of lack of flexibility of movement between one group of workers and another. It would take us backwards.
I cannot emphasise strongly enough the attitudes that have been created within the Post Office telecom units in recent years, which have led to the acceptance of productivity bargaining and the acceptance that men and women are multi-skilled, and do not stick to one craft. It will be harmful to British Telecom, reducing mobility in many ways and leading to great frustrations, difficulties and conflicts, if it does apply the same pay and conditions in the subsidiaries as apply in the corporation.
The subsidiaries are creations of the Government; they exist because of the Government's ideology. The staff will not accept having their security and conditions of service messed around with in this way. We shall be heading for a great deal of industrial turmoil if British Telecom presses


this matter. I hope that, after consultation with the chairman, Ministers will repeat the words of the Minister in Committee—
because it is clearly our intention that if employees of the Post Office are moved to subsidiaries, their terms and conditions of work will remain the same."—[Official Report, Standing Committee B, 20 January 1981; c. 156.]
If that is the Government's intention, why is it not on the Notice Paper as a Government amendment?

Mr. Charles R. Morris: My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) has rightly emphasised the anxieties of British Telecommunications workers about the position of employees in wholly owned subsidiaries. Amendments Nos. 59 and 61, in my name, reflect similar anxieties felt by postal workers in wholly owned subsidiaries established by the Post Office.
My hon. Friend was right when he expressed concern that in any newly established, wholly owned subsidiary the existing industrial relations and collective bargaining practices established in the Post Office over many years should be maintained. Amendment No. 61, standing in my name, provides that the conditions and terms of service of the staff of the wholly owned subsidiaries should be precisely the same as those enjoyed by Post Office workers generally. No doubt the Minister will argue that amendment No. 60, tabled by the Secretary of State, goes some way to meet what my hon. Friend and I said in this connection in Committee.
I should mislead the House if I did not alert Ministers to the difficulties that will arise if the conditions and terms of service in the subsidiaries are different from those in the Post Office. My hon. Friend said that we did not want any difference in the terms and conditions of service. Moreover, I do not believe that Post Office workers will accept any difference. The same unions will be involved in the established wholly owned subsidiaries and the same unions will organise the Post Office and telecommunications workers.
Therefore, even though I am encouraged by their amendment No. 60, I think that the Government should honour the obligation given in Committee, when the Minister said quite specifically that employees' conditions would be the same in the subsidiaries. We are debating not a minor industrial relations issue, but an issue that could develop into a major controversy.

Mr. Michael Marshall: We are debating a number of amendments which reflect what happened in the Committee proceedings. We had a valuable Committee stage. Important contributions were made by both sides, and we recognise the expertise that was displayed by a number of Opposition Members. It will be seen from a perusal of the Committee reports that the Government felt it right to bring forward amendments to meet the matters of substance that were raised by the Opposition, and tonight we have sought in our amendments to meet the genuine concern that they expressed.
I turn to amendments Nos. 7, 8, 59 and 60. We have considered the whole matter carefully. We undertook to have discussions with the chairmen designate of both BT and the Post Office. That we have done, and our amendments are the result of those discussions.
I was glad that the hon. Member for Newcastle-under-Lyme (Mr. Golding) accepted the spirit that motivated us

in bringing forward the amendments. I think that he will agree that the amendments provide that both corporations will have to ensure that the wholly owned subsidiaries will have to consult such organisations as they consider appropriate with a view to establishing and maintaining machinery in regard to those industrial relations activities listed here. In other words, the subsidiaries will be under the same statutory requirements for consultation with trade unions as are the Post Office and BT, although details of any machinery established will be for the subsidiary to resolve with its employee representatives. I hope that, in the light of that, hon. Members will not press their amendments on that aspect.
11 pm
The hon. Member for Newcastle-under-Lyme made a serious point about arbitration. Subsection (4)(a) of amendment No. 8 does not include a specific reference to arbitration procedures as does its equivalent in paragraph 12(1) of schedule 1. We do not believe such a specific reference to be necessary. We made it clear that wholly owned subsidiaries will be Companies Act companies and we have stressed time and again that they should, as far as possible, be subject to the provisions of general law. We recognise that to make no specific statutory provision on industrial relations matters could cause uncertainty among transferred employees. That is why we tabled our amendments, but we do not believe it necessary to go further.
As the hon. Gentleman said, the Employment Protection Act 1975 makes provision for arbitration and conciliation through ACAS. I appreciate his even-handed approach, but we do not believe that subsidiaries should be obliged to establish a separate arbitration service.
The hon. Gentleman also pointed out that there may be recourse to two arbitration facilities on similar problems. Our proposal would seem to lead towards the use of ACAS, but that does not rule out the agreed use of other arbitration. In discussions between employees and the managers of subsidiary companies, the options will be there for them to discuss.

Mr. Golding: Will the hon. Gentleman be prepared to discuss the matter with the unions involved if, after consideration of what he has said, they believe that a problem still exists?

Mr. Marshall: I shall consider that carefully. I do not want to give an off-the-cuff response. I have made it plain that there will be a fair and open opportunity, but naturally we shall always consider representations.
We gave an undertaking in Committee to discuss the matters covered by amendments Nos. 9 and 61 with the chairmen of the Post Office and BT. We kept that promise, and I believe that the Bill makes adequate provision in that respect.
Clauses 4 and 58, together with paragraph 2 of schedule 2, provide that contracts of employment will be transferred intact when staff are transferred to subsidiary companies. Thus, immediately after reorganisation, employees of the subsidiaries will be employed on exactly the same terms and conditions as before. The hon. Member for Newcastle-under-Lyme referred to the EEC directive on transfers of undertakings. He appreciates that the position will be reinforced once that directive is implemented.
The hon. Gentleman talked about the future, but it seems to us that our proposals on transfers are appropriate.


We cannot look into the future and see the sort of locking-in that he urged on us. The hon. Gentleman seemed to imply that those who are transferred may suffer, but the amendments would prevent employees of subsidiaries from negotiating improvements in their terms and conditions which were not, for whatever reason, available to corresponding employees in the Post Office or BT. A profit-sharing scheme is an obvious example.
We do not believe that it would be right, or consistent with the idea of giving the management and work force of a wholly owned subsidiary the opportunity of greater identification with their work, to debar them on the basis of the amendment. I hope that hon. Members will see that the position is much more open and, I hope, more promising as the matter rests and that they will not press the amendments.

Amendment negatived.

Amendment made: No. 8, in page 8, line 18, at end insert—
'(4) As regards any wholly owned subsidiary of the Corporation, the Corporation shall secure that the subsidiary seeks consultation with any organisation appearing to the subsidiary to be appropriate with a view to the conclusion between it and that organisation of such agreements as appear to the parties to be desirable with respect to the establishment and maintenance of machinery for—

(a) the settlement of terms and conditions of employment of persons employed by the subsidiary;
(b) the promotion and encouragement of measures affecting efficiency in the carrying on by the subsidiary of its activities, including, in particular, the promotion and encouragement of the training of persons employed by the subsidiary; and
(c) the promotion and encouragement of measures affecting the safety, health and welfare of persons employed by the subsidiary.'.—[Mr. Michael Marshall.]

Clause 6

GENERAL CONTROL AND SUPERVISION BY THE SECRETARY OF STATE

Mr. Golding: I beg to move amendment No. 10, in page 9, line 24, leave out from first 'The' to 'dispose' in line 26 and insert:
'Corporation may, after consultation with the Secretary of State,—(a)

Mr. Deputy Speaker: With this we may discuss the following amendments:
No. 11, in page 9, line 28, leave out 'to'.
No. 12, in page 9, leave out lines 32 to 35.
No. 62, in clause 60, page 51, line 8, leave out from beginning to end of line 9 and insert—
'"(5) The Post Office may, with the consent of, or in accordance with the terms of a general authority given by, the Secretary of State—'.
No. 63, in page 51, line 10, leave out 'to'.
No. 64, in page 51, line 12, leave out 'to'.
No. 65, in page 51, line 16, leave out 'direction' and insert 'consent or general authority'.

Mr. Golding: The purpose of the amendment is to ensure that the power to direct the sale of assets is taken from the Secretary of State. It is an important amendment. The Post Office Engineering Union has for many years bitterly opposed hiving off.
The Bill gives the Secretary of State the power to hive off by giving directions to British Telecommunications to sell assets. After fighting an election claiming that they

would interfere less with nationalised industries, why on earth have the Government decided to take power to interfere in this way?
I realise that British Telecom must have the power to sell assets which it does not need and to conduct its business as best it can, but the Secretary of State is again lifting his head from all the problems that he has created in the steel, car and other manufacturing industries. He has created one problem after another. He has had to find finance to save industries which he has done all that he can to smash. The Government are destroying our manufacturing base. At the same time, they are making desperate efforts to save what they can of British industry because of the cost of maintaining high unemployment. Now, the Secretary of State is to be given the power to sell assets.
This Secretary of State will sell assets for the worst possible reasons. First, he will be tempted to direct British Telecommunications to sell assets so that he can avoid going to the Treasury to ask for further investment finance. He will direct British Telecommunications to sell assets which could be profitable in future and which were created as a result of public investment and skill. He will direct the sale of the assets because of the shortage of cash in the Government's coffers. He will ask British Telecommunications to sell profitable assets in order to afford investment in profitable ventures. How daft that is. The Government are destroying profitable public business. I hope that we shall always oppose very strongly the destruction of our publicly owned businesses.
The instruction to sell assets will be issued not only because of the economic necessity that the Government have created for themselves but because of the temptation that the Secretary of State always feels when he sees a profitable part of the public sector to sell it to his friends in the City. That is a temptation which we should take away from the Secretary of State, because the Government will get into more and more difficulties. As they sell off the profitable parts of the public sector they will find it increasingly difficult to maintain the parts that remain in public ownership. They will use the difficulties that are created in order to try to discredit the whole notion of public ownership.
Valuable assets should not be sold, because if they are sold we shall not be able to meet the social and industrial needs of the country. There is a need now and there w ill be in the future for the profitable growth parts of British Telecommunications. The significance of this can be seen if we postulate that British Telecommunications could have developed Prestel and then seen it sold off.
The provision here is the same as the provision in earlier clauses. The Government are seeking the power to enable private individuals—outsiders who have taken no risk in the development of certain products and certain services—to come in and take the easy pickings. We should never give the Secretary of State the power to direct the sale of assets, because it is completely daft at the present time for Britain to be selling off its public assets. It is ridiculous that we are to deplete the public purse by selling off the profitable, expanding industries that have a great future. It is absurd for the Government to sell them off in order to save something from the wreckage of their own economic policy.

Mr. Charles R. Morris: The purpose of amendments Nos. 62, 63, 64 and 65 is to delete the draconian powers


taken by the Secretary of State in this Bill to direct the Post Office to dispose of its assets and to allow the Post Office itself to take such action.
The amendments are directed to a subsection of clause 60, which, together with clause 65 on derogating the monopoly and clause 66 on licences, constitutes the heart of our opposition to the postal side of the Bill. It is my contention that this subsection facilitates the privatisation of parts of the Post Office and thereby threatens the very survival of a countrywide postal service. I accept that the postal service is less vulnerable to this kind of asset stripping than is the telecommunications service. But what I am seeking to do by these amendments is to stop the Secretary of State from hiving off profitable activities of the Post Office to the Tory paymasters in the private sector.
11.15 pm
The Minister will accept that the Post Office is finely balanced. It is under enormous financial pressure, largely because of the Government's attitude to the financing of nationalised industries. The Government's squeeze on cash limits is having a severe impact and their interference in pricing policy has compounded the problem.
I illustrate my argument by referring to the ½p increase that was denied to the Post Office on second class mail. The House will recall that it was permitted only a 1½p rise in postage rates and tariffs instead of the 2p increase that was needed. That decision denied the postal business about £30 million in lost revenue in a full year. Interestingly, this is about the same as the £30 million loss in the first half of its current accounting year to September 1980. One can see the fascinating correlation between the actions of Government and the financial impact that those actions can have on the management of the Post Office.
As a result of both improved productivity and the recent tariff increase on 26 January, the postal service expects to recover the position and remain in the black, making a small profit by the end of 1980–81. But it will still fall short of the financial targets that the Government have set. To meet this gap, the Post Office is seeking staffing economies to raise at least £35 million net, meaning staff reductions and economies of about 4½ per cent. As a result of an agreement with the Union of Communication Workers at national level, management has issued a circular to all areas and local discussions are now taking place on making further savings.
It is difficult to estimate what results these proposals will produce. This will be the third major drive for economies since 1975–76. Much will depend on the vigour with which this is pushed by management. There is every sign that local managers will be encouraged to press hard. We are bound to ask the Minister what the Government envisage as possible candidates for privatisation. In Committe the Minister rightly and sensibly ruled out privatisation of Post Office counters. He surely cannot be thinking of the privatisation of any part of the main mails network. Can it be the potentially profitable electronic mail services like Intelpost, which is presently envisaged? If that is so, we would stress how damaging any such proposal would be.
It is self-evident that the advent of electronic mail will itself erode the volume of letter traffic. The Post Office forecasts that the volume of inland letters will remain

about the same until 1983–84 and then begin to decline over the following five years. The estimated drop in the volume of letters handled by the Post Office by 1988–89 is envisaged as being 16 per cent. On the other hand, parcels are expected to increase by 38 per cent., overseas mail by 19 per cent. and agency work by 8 per cent.
A huge growth in electronic mail is predicted, directly affecting postal traffic. I was fascinated to read the Science Policy Research Unit report, which highlights the growth of communicating word processors—basically typewriters with visual display units that can store and edit text—and the growth of facsimile photocopying enabling a document to be electronically scanned and transmitted to a distant location over the telephone network and there printed out as "hard copy". SPRU's forecasts show a loss of postal traffic as a result of such electronic mail services. The question is by how much and when.
Electronic mail will be used especially on a business-to-business basis. SPRU reviews the forecasts of the extent of the impact which those developments may have. It concludes that a loss of postal traffic of 25 per cent. is likely as a result of electronic mail by the end of the decade. That would in turn mean a loss of about 35,000 jobs in the postal service. It is therefore vital that posts should continue to have the electronic mail services and the other new services introduced in the last 12 months as part of a comprehensive postal business.
We object to the Government's whole philosophy towards public corporations. If they are unprofitable, the Government are quick to jump on them. If they are profitable, they are to be privatised and hived off.
My amendments are directed to a subsection which is unacceptable because of the draconian powers given to the Secretary of State to direct the Post Office to dispose of its profitable assets. I hope that the House will divide on the amendment.

Mr. McWilliam: We were told in Committee that the Secretary of State was taking those powers but probably would not use them. If that is so, why is he bothering to take the powers at all? That seems strange, because it is taking up time and the Bill is long and complicated. If the Secretary of State is not going to use the powers, why should he seek them?
I do not wish to quote my sources, but I was always taught that good capitalist philosophy was that one should not live off one's capital but should live off one's income. That is eminently sensible, although I shudder to say it from the Opposition Benches. The powers in the clause give the Secretary of State the opportunity willy-nilly to dispose of the capital assets of the Post Office without recourse to any question whether the income from those resources is needed to maintain services in posts or telecommunications. There have been examples in the last 18 months in which, because of the daft system of Government cash limits, that has happened.
In its wisdom, the Post Office decided that because of cash limits on the postal service it would dispose of the Hope Street Post Office building in Edinburgh. It was sold and leased back from the people to whom it was sold. That is nutty. If the building is profitable for the people to whom the Post Office sold it, it must originally have been a good investment for the Post Office.
The amendment seeks to put the onus not on the Secretary of State but on the corporation to initiate any such disposal of assets. It should take that decision in the


light of the business climate with which it is faced. Only then, if it is satisfied that there is a good case for disposing of capital assets, should the corporation ask the Secretary of State whether he agrees.
The position at present gives the Secretary of State the same kind of powers as a medieval Eastern potentate. He can dispose of the corporation's needed assets without any concern about the revenue which would result from the retention of those assets. It allows the right hon. Gentleman to dispose of those assets, whether or not it is in the best interests of the corporation, the Post Office or the country.
I do not think that this is a reasonable clause. The opportunity to introduce a political bias into what is fundamentally a business consideration is great. By their very nature, Secretaries of State are busy men. I do not exclude the Secretary of State for Industry. Not only are they busy men; I doubt whether they have the time completely to analyse all the effects which such an arbitrary decision may have.

Mr. R. B. Cant: Is it not remarkable for the Secretary of State for Industry to pursue this policy when the Secretary of State for Energy has been overruled not only by the Foreign Office but by the Treasury on the sale of part of the BNOC's assets?

Mr. McWilliam: It is more than remarkable. It is quite ridiculous that the right hon. Gentleman has got himself into this situation.
The Secretary of State has made it perfectly clear in the past that he believes in capitalism, free enterprise and business working in the way in which it ought to work—

Mr. Mikardo: He believes in Adam Smith.

Mr. McWilliam: Exactly. He believes in Adam Smith.

Mr. Dennis Skinner: Is he a Member?

Mr. McWilliam: No. He is buried in the Canongate kirk in Edinburgh. He was an economist once upon a time.
The right hon. Gentleman believes in Adam Smith. It is also clear that he has not fully thought through the fact that if he operates these powers without regard to the business requirements of the Post Office, at some time in the future he will have to answer not only for what he has done in the past but for what he is likely to do, given these powers.
I doubt very much whether the right hon. Gentleman will have the opportunity seriously to consider all the implications of what exists within the clause. The clause is dynamite. It is really dangerous. If the corporation initiates such decisions, I do not mind, because it can at least be argued that they are taken for sound business reasons. If, however, the Secretary of State is to initiate such action, it can only be seen as further political action designed to meet the requirements of those who put so much money into Conservative Party funds. That is dangerous, and could cause problems.
I would far rather see the amendment carried and the temptation removed from the Secretary of State. Without it, he might later on grab this tempting apple.

Mr. Mikardo: My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) and my right hon. and hon. Friends who have supported the amendment have directed their thoughts to what the Secretary of State might

do with the substantial powers given to him in the clause. I agree with everything that they have said, and I shall be adding my own small voice to what they have said.
Irrespective of what the Secretary of State may intend to do with the powers if he gets them, we must first consider whether he ought to have the powers at all. A short while ago there was an exchange about what the Secretary of State believed in. I know one thing that he believes in, because he has said so many times. He said it some time ago when he gave evidence to the Select Committee on Industry and Trade, of which I am member. He gave some more evidence to the committee today, and I was sorry that I could not be present as I was here in the Chamber. Some time ago, when the Select Committee questioned him about British Leyland and the British Steel Corporation, the Secretary of State held to the thesis that the business of a sponsoring Minister vis-vis-vis a publicly owned industry was merely to lay down broad lines of policy and not to intervene in its day-to-day management or in the business decisions that it took, or ought to take, on purely commercial criteria.
I agree profoundly with that proposition. Fourteen years ago, when I was its Chairman, the Select Committee on Nationalised Industries produced a major report on relations between Ministers and the nationalised industries which said precisely that. It is the business of the Minister to lay down broad policy and the business of the chairman of the corporation and the members of his board to manage the organisation and to make the commercial decisions necessary to implement that broad policy.
The trouble with the Secretary of State is that he does not practise what he preaches. He preaches Adam Smith, but practises Mr. Busybody. The powers given to the sponsoring Minister under the Bill are contrary to what the Secretary of State has argued is the right attitude of a Minister to a public corporation. Having been involved in the discussion of every nationalisation and denationalisation Bill since 1945, I speak from experience and I weigh my next words carefully. The Minister's powers under the Bill are wider, deeper and stronger than the powers taken by a Minister under other legislation relating to the relations between a sponsoring Minister and a public corporation.
In Opposition and during the election, Conservative Members complained steadily that there was too much government. Even the Minister himself used to say that there was too much Whitehall interference—for example, with the powers of local authorities. Then, under the Local Government, Planning and Land Act, the Secretary of State for the Environment took more draconian powers over the local authorities than any Minister has ever had, turning councillors, including Conservative councillors, into virtual puppets.
Exactly the same has happened with industry. I often agreed with Conservative criticisms that Ministers interfered too much in the decisions and investment programmes of the nationalised industries. Yet now they are doing all the things they criticised others for doing, only more so—and never more so than in this Bill, under which every decision by the two organisations here created will be subject to more detailed dictation than any other public corporation.
I have mentioned the Minister's theory about relations between him and the nationalised industries, and what he said to the Select Committee on Industry and Trade. The proceedings of that Committee have made it clear that this


Government are interfering more closely in the detailed management of the public corporations than any of their predecessors did.
In six months, the chairmen of the Post Office and British Telecom will face the same problem as already confronts the chairmen of British Leyland and British Steel. Those two gentlemen have been asked, "Do the chaps in the Department of Industry who interfere in your investment programmes and criticise your decisions have more expertise than you? If not, by what authority can they tell you what to do? If they are more expert than your managers at making steel or motor cars, should they not be working for you?"
The same applies to the Bill. If people in the Department are more expert at running telecommunications services than are people in British Telecom, they should be working for British Telecom. Then their expertise would yield the best results, for the national benefit. If they are not more expert, why are they telling those concerned how to run their business?

Mr. Skinner: My hon. Friend is talking of people in the Department who would be expected to take on the job hitherto done by those at managerial level in British Telecom. Is he taking into account the fact that whole sections of the staff of Departments of State are now engaged in strike action? Could it be that even some of those in the First Division Association, who voted marginally in favour of a strike, much to the astonishment of myself and my hon. Friend, are not likely to be in the best frame of mind to do anything on behalf of the Secretary of State or his junior Ministers? They are worried about the way in which the Government have kicked them from pillar to post over their wages. That may be an added complication which we have to face if we go ahead with this proposal.

Mr. Mikardo: I am grateful to my hon. Friend. I confess that that is a point that I had not thought of—and neither, I suspect, had the Minister. Certainly it had not occurred to those drafting the Bill. If the present industrial action goes on for any time, as my hon. Friend sugggested, the points I am making will become even more weighty.
In a sense the Minister is acting like the chairman of a holding company in respect of these two corporations. He is acting as though they were held by a single holding company of which he is chairman. I know of no greater power of interference in the running of an organisation than the power to decide what subsidiaries can be set up, what functions they should carry out, how they should be capitalised, what assets they should acquire, what assets they should dispose of and what should be the functional boundaries between subsidiary A, subsidiary B and subsidiary C. There is no action that can be taken by the board of a holding company which constitutes more detailed interference in the management of subsidiaries than interference in those decisions. That is exactly what the Secretary of State is giving himself the power to do.
I think that the right hon. Gentleman would find it difficult to find men of spirit to run these corporations if they are to be subjected to the ministrations of a puppet master in the Department of Industry. I would not take the job on those terms. I speak as one who has been invited

to take this sort of job. I would not take a job on the basis that I am just a puppet of the Minister. That is what these people will be.
We have heard talk of draconian powers. These are not merely draconian powers; they are all-pervasive. They leave the people over whom the power is exercised with literally no room for manoeuvre and no right of decision. How does the Minister reconcile this with Conservative Party theory and with all that it preaches about less Government interference?
11.45 pm
We have been debating the Bill for over eight hours, but the Secretary of State condescended only to pay us a fleeting visit. If he had been present I would have asked him about Adam Smith. Adam Smith would have voted against the Bill on Second Reading, on Report and on Third Reading. To place power over a business in the hands of a Government Department to such an extent as this is to fly in the face of everything that he wrote. How can the Government justify that? How do they expect to carry out a policy—making function if they spend their days making management decisions about British Telecommunications and the Post Office? Those decisions should not be taken by them.
My right hon. and hon. Friends suspect that these powers will damage the national economy because the good bits of the business will be hived off. Bad bits will not be hived off, because no one will buy them. All the profitable bits will go and all the loss-making parts will remain, and Conservative Members will be able to make weekend speeches on the subject that nationalisation is always unprofitable because nationalised companies lose money. If the profitable parts are sold, the remaining parts will lose money. Conservative Members are writing themselves briefs for weekend speeches which they will make in 12 or 18 months' time.
That is not the way to treat two industries with great and proud records. In some respects they are the envy of parallel industries in other countries. This device will facilitate hiving off. That is its only purpose, and it is utterly transparent. We shall not conclude our proceedings before lunch-time tomorrow. Before the conclusion, I hope that my right hon. Friend the Member for Salford, West (Mr. Orme) will give fair warning—caveat emptor—to anyone who is thinking of buying his way in. After a few years he may find that he has not made a very good investment. Potential investors should be well warned: a change of Government is inevitable, and no one will be allowed to get on the gravy train that the Government are signalling out of the station. Doubtless some will climb on board but ere long the train will stop. Those on board may find that it has stopped before they have had time to get any gravy.
I do not speculate except occasionally on four-legged animals, but sometimes friends ask me for advice. The last thing that I would advise them to do is to invest one penny in a hived-off asset. I shall sit down because I want to listen to the Minister. I look forward with passionate and breathless interest to the great disquisition that we shall hear about how the theories of Conservative non-interference with business can be reconciled with the Bill, which I repeat gives the Secretary of State wider, deeper, greater and more persuasive powers than any other Bill introduced since the end of the war.

Mr. Stott: I shall briefly take part in this important debate on the industry that I spent my entire working life serving and working for.
My hon. Friends the Members for Blaydon (Mr. McWilliam) and Bethnal Green and Bow (Mr. Mikardo) spoke briefly about Adam Smith. They said that the Government seemed to pay much attention to that gentleman's economic philosophy. I suggest that the Government have exhumed the rotting corpse of Adam Smith and have dragged it stinking into the second half of the twentieth century. They have put people to an economic experiment which has as much relevance to the twentieth century as the spinning jenny.
I have observed the way in which the Government introduce their legislation. In rapid succession they have introduced a number of Bills which seek to denationalise and privatise the profitable parts of the public industry. As they won the election with a large majority and we live in a democracy, we cannot argue about that. We might argue about the detail, their philosophy and their reasons for doing it, but we do not argue that they have a right to introduce Bills to do it. One of the most extraordinary things that the Government have done, as my hon. Friend the Member for Bethnal Green and Bow elucidated so admirably, is that not only are they seeking to privatise a number of profit-making public industries; they are enshrining in legislation provisions which give individual Secretaries of State draconian powers. I would use the words "powers of a despotic dictator".
Conservative Members should be entirely clear about what they are voting for. I wonder whether many of them have read page 9 of the Bill. If they have not I draw it to their attention. Clause 6(6) provides:
The Secretary of State may, after consultation with the Corporation, direct the Corporation—
that is, British Telecom or the Post Office, the biggest business in Europe, employing more people than any other industry—
to dispose of any part of its undertaking or any assets held by it
The House is investing those powers in the Secretary of State. [HON. MEMBERS: "Hear, hear".] Hon. Gentlemen say "Hear, hear". They were elected on the basis of less Government interference. That was a fraudulent promise if ever there was one. We have seen a catalogue of Government interference in publicly owned industries. In every Bill—whether it dealt with British Airways, British Aerospace, flogging off British Rail subsidiaries or the British Transport Docks Board—every Secretary of State has taken upon himself the ultimate power to dispose of assets without reference to the House.

Mr. McWilliam: Does my hon. Friend share my concern that the intellectual athletics of the Secretary of State in exercising his powers may be similar to those when he closed profitable steelworks like Consett and thus had to write off the capital deficit on the remaining plants?

Mr. Stott: That is a serious point, worthy of comment, but perhaps not now.
I bow to the knowledge and expertise of my hon. Friend the Member for Bethnal Green and Bow, who has been in the House for much longer than I have. He has never before seen a Secretary of State taking such powers. Why is the right hon. Gentleman taking the powers? Does he believe that it will make British Telecom better? I have worked for the company for my entire working life and

know that it has nothing to apologise for. It may have been financially starved by Governments of both parties, but in its productivity, innovation, and research and development it has nothing to apologise for.
The Secretary of State is taking powers to flog off the profitable parts of British Telecom and the postal service. No one should doubt what the Bill seeks to do. The Secretary of State is taking the power to flog off PABXs and house exchanges.

Mr. Martin Flannery: To his pals.

Mr. Stott: That is right. He will flog off the profitable bits of secondary instruments in large conurbations. He will not flog off the 40-span route on the Pennines on which I worked, waist deep in the snow, mending the faults for the farmers. No one would be daft enough to buy it. We had to provide the customer with a service. We had to provide on the Rowland Hill principle a certain level of service throughout the United Kingdom, whether in London, Todmorden or the Isle of Skye.
The right hon. Gentleman will use the powers in the Bill to dismember an efficient organisation called British Telecommunications. That is why I and my hon. Friends the Members for Blaydon and for Newcastle-under-Lyrne (Mr. Golding), who have spent our lives in this industry, and also my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris), will resist the Government's proposal as long and as hard as we can.
I have observed the manner in which the Government write legislation. Every Bill that comes forward is a massive enabling Bill to permit the Government to do what they want. We have learnt the lesson. We have learnt the language. We have learnt the words. When the next Labour Government comes to power, we shall use similar enabling powers to take the whole damned lot back.

12 midnight

Mr. Skinner: My hon. Friend the Member for Westhoughton (Mr. Stott) was present at the lobby today by several thousand men and women belonging to the Post Office Engineering Union and the Union of Communication Workers. My hon. Friend made a speech, as did my right hon. Friend the Member for Salford, West (Mr. Orme) and my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo). Those speeches raised the spirits of most of those present. The message was that Opposition Members tonight would be fighting the Bill line by line, putting forward all possible amendments to carry proceedings through until dinner time. It has happened before. On that occasion, we smashed the Government's business for the day.
Those who attended today's meeting in Central Hall were rallying to our intended action over the Bill tonight. I gained the clear impression that the proceedings would last a long time. The Government should grant another day for this Report stage and Third Reading. There should be a reappraisal. The Bill, with its multitude of clauses and schedules—

Mr. David Crouch: It is general.

Mr. Skinner: Yes, it is general. It is about as general as you were—

Mr. Deputy Speaker: Order. As far as I am aware, I have not been general at all. The hon. Gentleman is being general. He should address himself to the amendment.

Mr. Skinner: I have to answer the riposte of the hon. Member for wherever-it-is—

Mr. Deputy Speaker: Order. The hon. Gentleman must address himself to the amendment and pay little attention to interventions.

Mr. Skinner: I think you will agree, Mr. Deputy Speaker, that if a challenge is made from the opposite side of the House, it is necessary to reply. The hon. Gentleman said that the speech was general. I have heard some other general speeches while I have been sitting in the Chamber. I remind the hon. Gentleman that he was making very general remarks when the miners were on strike. He went on the radio that morning, frightened to death—

Mr. Deputy Speaker: Order. Whatever the hon. Gentleman said on radio that morning, it clearly had nothing to do with the amendment.

Mr. Skinner: The hon. Gentleman had a different attitude then from his attitude now. He is being a little belligerent now. That morning, he went running to the BBC to say that it was time that the Government changed their policy. The people I met today in Central Hall were demanding that the Governments hould change their policy.
Another day should be allocated for the Bill. That is a fair point in our discussion of the amendment. Insufficient time has been allowed. A new clause to deal with the interception of mail, and so on, was an additional item. Debate on it took up part of the time allowed, and that should be taken into account. More hon. Members are coming into the Chamber, and the chances are that they will take part in debates on other amendments.
My constituents from Bolsover and people from the adjoining districts, from Chesterfield, Sheffield and elsewhere, told me "Get into the House and keep those lousy Tories up as long as you can". Those people are fighting for their job security.
The Social Democrats do not appear to be represented tonight. They reckon to be in favour of the mixed economy. The Bench where they usually sit should be full.
I am responding to the discussions and the rally that took place this afternoon. Those on the lobby were so successful that they managed to grab more Tories than on many other occasions. Most of the time, Tory Members and all the other ragbag—

Mr. Deputy Speaker: Order. The hon. Gentleman has been over similar ground on many occasions. He knows how to stay in order on an amendment. He must keep to the amendment.

Mr. Skinner: This is the first time I have spoken in a debate dealing with postal and telecommunications matters, so you have not heard that before, Mr. Deputy Speaker. You have not heard that there has been a lobby today—

Mr. Deputy Speaker: Order. There is nothing about the lobby in the amendment.

Mr. Skinner: There has been a massive lobby today of people who work in the industry. Nobody on the Government Benches works in the industry. Some of my hon. Friends have played a leading role in it and some are still engaged in union activities. The people whom I met are fighting for their jobs. Nobody here is fighting for his job, apart from the Liberals, who are frightened to death of the Social Democrats.

Mr. Deputy Speaker: Order. I have told the hon. Gentleman a number of times that he is entitled only to speak to the amendment. So far, he has made little mention of the amendment.

Mr. Skinner: The amendment deals with the draconian powers being given to the irresponsible Secretary of State. Handing over those powers could mean the demise of many thousands of jobs in the industry, if he gets hold of the reins. He has been a disaster from beginning to end. He should not be allowed to have such powers. Every time people see him on television, they nearly all think that he has gone mad. They say that it is time he was shifted.
Imagine, Mr. Deputy Speaker, handing over power to that fellow. He was fighting in the Cabinet and during the pre-election period for the true implementation of Friedmanism and the philosophy of Adam Smith and others, yet he has spent most of his time in the past six months handing out money, in complete contradiction to what he believes in.
The Secretary of State got into such a mess with British Steel that he had to find £5,000 million as a result of his policies over the previous 18 months. He had to—

Mr. Deputy Speaker: Order. There is a limit to the number of times that I can ask the hon. Gentleman to return to the amendment. Will he now please try to do that?

Mr. Skinner: The amendment is clear. My hon. Friends are saying that they do not want to hand over these powers to the Secretary of State, and they have said why they do not trust him with such powers. My language is perhaps more colourful than that of my hon. Friends, but we are all saying the same thing—namely, that in view of the past record of the Secretary of State he cannot be trusted with these powers.
Let us take the question of interference, to which my hon. Friend the Member for Bethnal Green and Bow referred. This Government interference has spread to the private sector. They hope to hand over lucrative parts of the telecommunications service to the private sector. What guarantee is there that the private sector can handle them? Naturally, it picks the juicy bits, but it has not been very successful in dealing with the juicy bits in manufacturing industry. It is not long since the Secretary of State came to the Dispatch Box and said that the part of the private sector known as ICL was up to its neck in trouble. He announced a proposal that might involve £200 million being handed over to bail out ICL in the private sector, yet here he condemns the public sector for not being efficient.
The amendment proposes to hand over certain parts of this important and efficient industry to the private sector. I am saying that we cannot be sure about the private sector. All of industry is being run down by the present Government. They are de-industrialising all industry, not just the public sector. As a result, the Governor of the Bank of England had a secret meeting with people from private industry, and with a nod and a wink from the Treasury millions of pounds were handed out to firms like Stone Platt, which cannot keep their heads above water.
So it is nonsense for the Secretary of State to have powers to hand over parts of a viable public sector, which would be even more viable if it were given more money and not restricted by cash limits to the tune of about £200 million. It would be nonsense to hand over parts of that


industry to people in the private sector like Arnold Weinstock—now Lord Weinstock—who will pick up the juicy bits and probably make a short-term profit.
Is there any guarantee that GEC and others will not come to the Government later and say to the same Secretary of State—probably he will have gone by then, and we shall have another one—"We are in a mess. You had better organise another meeting with the Bank of England, because we want bailing out"? That is why it is nonsense to hive off an important part of the public sector and hand it over to such people.
For that reason, therefore, the amendments should be supported, quite apart from many of the other reasons that have been advanced by my hon. Friends. My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) said that one of the reasons for the hiving off was to get sufficient money to bail out the Government's disastrous fiscal policy. They have had a bout of, monetarism or Friedmanism and it is not working, so 'the Cabinet said "Let's hive off parts of the public sector. It is a good idea in principle, and we can shovel off bits to our friends who provided us with money for the election. At the same time, we can draw in sufficient money to enable us to balance the books."
12.15 am
Of course, the Government did not realise that while they were making all their wondrous plans the dole queues were lengthening and, as a result, the public sector borrowing requirement went through the roof—about £5,000 million over the top. Even if they sold all the lucrative bits of the telecommunications industry they could not amass £5,000 million.
The Bill is an attempt to balance the books. It is nonsense to say that it is good economics. The Bill, like other attempts to sell parts of the public sector, is an attempt by the Government to bail themselves out. Their monetarist strategy has been found wanting and they do not know how to escape.
My hon. Friend the Member for Westhoughton referred to a lesson that we must learn. We know what we shall have to do to ensure that this situation does not arise again. This massive enabling Bill gives powers to the Secretary of State. I remember that when Ministers in the Labour Government proposed an enabling Bill they were laughed at by the Tories in Opposition, who threatened us with the media, which, by and large, they have in their pocket, and used our proposal against us in the election campaign. But they have produced an enabling Bill to allow the Secretary of State to meddle and interfere. It is a complete contradiction of what they said in Opposition.
Next time, we shall need an enabling Bill. It may not need as many clauses as the Bill that is now before us. Perhaps the civil servants who are still knocking around at the time might—I put it no higher than that—be more favourably disposed to us after all the agonies that they are going through at present. We might have won a few friends; I am doing my best. They might assist us in drawing up that enabling Bill to make sure that the attack contained in the Bill cannot be launched in future. We must ensure that when we tie up the loose ends next time, this lot, and some of their Social Democratic allies—where are they?—fighting for a mixed economy, cannot interfere in this way.
The most important lesson is that the Bill is only one strand of a deliberate Government strategy to attack the

wealth creators in this country—the workers, the 25 million people who produce the wealth. Many have been thrown out of work as a result of the Government's policies. When we get back, we shall have an enabling Bill to deal with this mess and we shall ensure that we have learnt the lesson that we must represent our class interests. That will enable us to ensure that we carry out a Socialist programme with which the Tories will not be able to meddle in the future.

Mr. Kenneth Baker: The debate has ranged wider than might have been expected from looking at this modest amendment. I hope that members of the NEC of the Labour Party who have just, listened to the tirade by the hon. Member for Bolsover (Mr. Skinner) paid particular attention. They will adopt what he said for their manifesto at the next election. There speaks the true voice of the Labour Party. They will all go along with it at the next election.
The hon. Member for Newcastle-under-Lyme (Mr. Golding) accused my right hon. Friend the Secretary of State—and I could hardly believe my ears—of creating the problems of British Steel, British Leyland and British Shipbuilders. We did not create them; we inherited the whole damned lot from a Government who refused to face many of the problems of nationalised industries during the six years that they were in power.
The hon. Gentleman said that we had engaged in a policy of destroying the profitable parts of the public sector. I could hardly believe my ears. The problems that burden the economy and the national finances are not the profitable parts of the public sector but the unprofitable parts. They go back to our inheritance and the refusal of the Labour Government to deal with many of the long-standing and intractable problems.
The debate covered the philosophy of the two major parties about private and public ownership. That mirrors the great divide between the two parties. We prefer more in the private sector and less in the public sector. The Opposition do not support that view and are not in the business of politics to support it. We have begun to implement our beliefs in that philosophy with the sale of British Aerospace a fortnight. ago.
It has been said that we were selling British Aerospace to Tory paymasters. About 40 per cent. of employees of British Aerospace bought shares in the company. They cannot be described as Tory paymasters. As a result, 6 per cent. of the company's equity is now owned by the people who work in it. That is why a little over a fortnight ago I announced that later this year we shall offer for sale 49 per cent. of the Government's ownership and shares in Cable and Wireless. I have no doubt that that will be successful. It is a curious and old-fashioned belief that only public ownership is good and virtuous. Aneurin Bevan himself abandoned that belief.
I deal now with the amendment. Several hon. Members made much of the inclusion of the Secretary of State's power in the Bill. They must recognise that a similar power appears in many other nationalised industry Acts, including those which nationalised gas, electricity, transport and steel. Hon. Members have expressed passionate anger about the powers that we are asking for, but such powers are included in Acts introduced by Labour Governments. Governments of both political parties have


felt it appropriate to take that power. I do not believe that they were wrong to do so. I do not believe that the present Government are wrong to do so.

Mr. Mikardo: The Minister really cannot get away with that. None of the Acts specifically provides the power for hiving off as widely or in as much detail as this Bill.

Mr. Baker: The hon. Gentleman anticipates my next remarks. I can assure him that the Acts that I mentioned contain powers of discretion for the Secretary of State to give directions to nationalised industries to dispose of their assets. The phraseology which we have used in the Bill is exactly the same as that which has been used in the past.
It is not a power that the Government, in all probability, will use on an extensive basis. It is a reserve power and it will be usual for the boards of BT, or the Post Office to consider and implement disposal of surplus land or such other to raise essential funds.
Nevertheless, it may be necessary for the Secretary of State to use his powers. I shall not give hypothetical examples, but I emphasise that they would be primarily concerned with what might be called the fringe activities of the Post Office or BT because if there were a major disposal of some of the assets mentioned by the hon. Member for Westhoughton (Mr. Stott) this would involve further legislation because of the statutory privileges and the wayleaves which bodies like the Post Office Corporation and British Telecommunications enjoy.

Mr. Martin J. O'Neill: Can the hon. Gentleman guarantee that the Secretary of State would not use his ideological commitment to use these powers, that he will allow people in charge of the various departments and establishments to use their judgment and will not use his political and ideological commitment to force sell-off on them? This is what is really worrying, not only in this nationalised industry but in many others.

Mr. Baker: I have just specifically said that. I have dealt with that exact point.

Mr. Crouch: On a point of order, Mr. Deputy Speaker. Can you help me at this late hour by letting me know whether this debate will end when the Minister sits down or whether you will be calling other hon. Members who wish to speak?

Mr. Deputy Speaker: We shall have to wait until the Minister sits down to see whether any hon. Members wish to speak.

Mr. Baker: That was obviously an anticipatory gesture by my hon. Friend.
I said in Committee, and I say again, that the various powers which the Secretary of State has under this Bill—the power to create subsidiaries, the power to direct the corporation to dispose of assets, and the power to licence—will always be used in the general context that whatever happens in future British Telecommunications will still provide the basic telephonic and telecommunications network of the country, although in the liberalised regime there will be many other private companies that will be able to offer services. That will undoubtedly improve both the efficiency of British Telecommunications and consumer choice.
Any Secretary of State, whatever Government may be in power at the time, will always be concerned about the effect of the use of these powers upon the basic viability of the business. If he uses the powers to thrust British Telecom or the Post Office into a substantial loss position the Government will have to pick up the tab for that. Therefore, we have to live in the real world and recognise the constraints that would lie upon him.
I have already said that we intend to move to a liberalised regime in the telecommunications industry. That is why this Bill and this power are important. I believe that when the Bill gets on to the statute book we shall see this great industry moving from one which has been dominated by monopoly to one being driven forward by competition.

Mr. Gregor MacKenzie: I listened with great care to the Minister's reply. I thought that he dealt less than adequately with some of the questions asked by my hon. Friends. I know that one or two Conservative Members are rather irritated. I have noted the irritation in some of their sedentary comments.
The Bill contains 86 clauses and has 127 pages. We all know that it is three Bills in one—a Bill about the Post Office, a Bill about British Telecommunications and a Bill about Cable and Wireless. If Ministers and their supporters present us with such Bills, they cannot expect to get them through on the nod.
These are extremely controversial measures, to which we take the strongest possible exception. This clause has provoked a great deal of anger on the Opposition Benches and in the industry. We would be doing less than our duty if, at this stage, we did not articulate at some length the views of those who work for the Post Office and of its customers and our own views, no matter the hour of the night, which is not something of our making. That responsibility lies with the Minister.
The Secretary of State is taking massive powers unto himself. The Minister quoted various measures in which Secretaries of State took powers to direct. I have not had the advantage of having served in the House for as long as my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo), but in almost 17 years' membership of the House I have never read a Bill in which a Secretary of State has taken so many powers to himself within one piece of legislation as the Secretary of State has taken in this Bill.
Secretaries of State are not given powers. They do not even genuinely seek powers. If Conservative Members, who are constantly telling us that they want much less intervention, read the Bill with care and learnt of the power that the Secretary of State and his successors will derive from this measure, they would be quite frightened by the powers that the right hon. Gentleman is taking to himself. Members will be whipped through the Lobby to ensure that the Secretary of State gets these powers, or that they are given to those who advise him.
We are worried that any Secretary of State should have such massive powers not only to advise and consult but to direct. The Secretary of State is responsible for the Post Office, British Telecommunications, the steel industry, shipbuilding and a range of British industries. How he can hope to exercise discretion in all these matters is beyond me.
The right hon. Gentleman is seemingly possessed of a versatility that knows no bounds. However, we know deep


down that he will not exercise these powers; they will be exercised on his behalf. When the various rules and regulations are issued that state that the Secretary of State will do this, that or the other, they will be exercised by those who are not elected and who are not responsible to the House. That must be a cause of concern even to Conservative Members. They are the very people who said in their election commitments that they thought that the Labour Party had interfered far too much with the nationalised industries. They said that nationalised industries should be given more freedom to operate as commercial enterprises. That is what is being denied them now.
Sir William Barlow, who was until recently chairman of the Post Office, said in one of his public lectures that he had been formally summoned to see the Secretary of State and the Minister of State more frequently in one year than during all the years when the Labour Government were in office. We should be concerned about how much power we are giving the Secretary of State and how he will boss the departmental chiefs, the chairman of British Telecom and others.
We know why the Secretary of State wants this power. The Minister of State said that he was in favour of liberalisation and privatisation and that we were not. This is where there is a wide divide. When I was a Minister I was often accused of being doctrinaire, but we can say nothing other than that the Secretaryy of State is exercising what we would describe as a purely doctrinaire policy. The Minister of State made a point of saying that it would be a reserve power and that he did not visualise the Secretary of State exercising it with great regularity. If that is so, what is the Bill about?
The Bill has but two purposes. The first is to break the Post Office's monopoly and the second is to sell off the more profitable parts of British Telecommunications. The Bill is wrapped up in 87 clauses, but those are only two reasons why we have the Bill before us now.
This part of the Bill will not be to the benefit of the consumer or the industry in general. We all know that the Secretary of State will not direct the chairman of British Telecommunications to sell off just a few pieces of land, as the Minister of State implied. He will direct the chairman of British Telecommunications to sell off its profitable growth sections. They will be bought not by charitable organisations but by people who are in the business of making money. It is their business to get on with making profits. I do not quarrel with a man who says that that is what he wants to do. However, we cannot wrap up the matter, as the Minister of State has done tonight, by saying that this section of the Bill is virtuous and that it will be for everyone's good.
Who will buy the unprofitable parts of British Telecommunications? Who will buy the unprofitable parts of the Post Office? No one. We are not in that sort of game. What irritates me about this part of the Bill is that the Minister will sell off the profitable growth sections which have been built up by skilled and talented people in the Post Office and which have reached their present peak because a great deal of public money has been spent on them over the years. The telecommunications side of the business has created its own profits and has reinvested them. That public money will be used to make a fast buck for many people in the private sector. That offends me, because the rewards of growth and enterprise should go to

those who created them. They should go to the staff of the Post Office and be used for improvements in services as well as expansion.
I believe that the organisations will suffer. Some of my hon. Friends have pointed out that in their weekend speeches a number of Conservative Members dearly love to say how bad and unprofitable the nationalised industries are. How will they be able to make a profit if all the profitable bits are sold off? I am sure that at some stage the Minister will be only too happy to tell us. If he carries out his policies logically, and if his public utterances are anything to go by, we fear that the organisations will suffer.
As of now, the two sections of the Post Office are considerable purchasers of British equipment. Both on Second Reading and in Committee we were alarmed by the fact that no guarantee is written into the Bill that the Secretary of State will direct BT or the Post Office to sell its assets only to British companies. Even if he were to do so, there is no guarantee that these companies would necessarily make their purchases from companies which operated in the United Kingdom. That is why we are concerned about the employment prospects for many of our people.
There have been redundancies throughout the country. In my constituency they occur in their hundreds every week. Therefore, the Minister cannot be surprised if we express considerable concern about the fact that no longer will there be a ministerial interest—which he has exercised in the past—in ensuring that these companies purchase from other British companies as often as they can.
The staff of BT and the Post Office are thoroughly demoralised by the measures proposed in this part of the Bill. They have worked hard to achieve something which is worth while, and are worried that it is being sold off now that it has reached a peak of achievement.
During the past few months, Conservative Members have said that this is all designed to help the customer. On Second Reading, the Minister of State chided my right hon. Friend the Member for Deptford (Mr. Silkin) for not mentioning the consumer frequently enough. I am concerned about the consumer, because that is what this debate is all about. If the best parts of the Post Office and BT are sold off, and if less money goes into their coffers, they will not be able to provide the best possible service and will have to charge more for it.
Conservative Members were aware of that concern. When the Secretary of State came to the House not long ago and indicated that he proposed to break the monopoly of the Post Office, it was his hon. Friends who were worried. They felt that people in the rural communities were bound to suffer. I think that it was the hon. Member for Fife, East (Mr. Henderson) who, while accepting the statement about breaking the monopoly in broad general terms, said that Conservative Members would be watching with great care to ensure that the rural areas were protected.
We have all seen over the past few months what the Secretary of State and some of his colleagues think about the rural areas. Many people think that the Government have treated those areas very shabbily. His Grace the Duke of Norfolk and his noble Friend Lord Butler of Saffron Walden created a great stir in the other place because they believed that people in rural areas were being shabbily


treated by the Government. I believe that one of the effects of the Bill is that people in sparsely populated areas of the country will suffer.
12.45 am
The Secretary of State has produced a Bill that will break the monopoly of the Post Office. Parts of the Post Office and the more profitable parts of British Telecom will be sold off. If anyone is worried about the reactionary nature of the Government, there is proof positive here. Not even the Governments of Stanley Baldwin, Neville Chamberlain, Winston Churchill, Anthony Eden, Harold Macmillan, the Earl of Home or the right hon. Member for Sidcup (Mr. Heath) ever dreamt of introducing a Bill of this kind. Not in 100 years of the most reactionary Conservative Governments has a Bill of this kind been produced. We had to wait for the right hon. Member for Leeds, North-East (Sir K. Joseph) to come to office. [HON. MEMBERS: "Hear, hear."] That is an accolade indeed. We now know how progressive and how concerned Conservative Members are about this matter. The clause will not help the staff of either organisation. It certainly will not help the industry. Both organisations will be the poorer for it. Above all, it will not help the customers. I therefore strongly urge my right hon. and hon. Friends to support the Opposition amendment.

Mr. Crouch: I know that I shall be unpopular in all parts of the House for keeping hon. Members up at this late hour, but I do not speak in favour of the Government's position, or, indeed, for that of Labour Members.

Mr. Frank Dobson: What about the Social Democrats?

Mr. Crouch: Nor do I speak for any side or party, large or small. I intervene in the debate because I was extremely moved yesterday afternoon by a representation made to me by no fewer than 15 trade unionists from three trade unions.

Mr. Skinner: I referred to that.

Mr. Crouch: I know that the hon. Gentleman did. They made their case to me with great cogency and sincerity but, I think, with some misunderstanding and unawareness of what the Government intend. They were greatly concerned about what the Government intended, not appreciating that the Government's intentions were not as bad as they thought.
I therefore intervene at this late hour on behalf of my constituents who pleaded with me to do so. They mentioned many aspects of the Bill, in which I had previously shown no interest other than to read it, take a passing interest, as one does, and see that it went through. But one cannot pass over a Bill when one is approached by constituents and made to realise that they are concerned and worried. When a trade unionist says to one, as a Tory Member, "We have never been on strike, and I retire next year"—

Mr. Skinner: A good thing, too.

Mr. Crouch: I do not mean myself. Even if I did, I assure the hon. Gentleman that there is no chance for him in my constituency. A trade unionist in my constituency who has worked all his life as a Post Office engineer and in his last year of service is to be transferred to British

Telecom told me that he was concerned to know what was in the mind of the Minister and the Government. He was concerned about what the clause seemed to say. That was well expressed by the right hon. Member for Rutherglen (Mr. MacKenzie), although with the exaggeration which is justified in an Opposition spokesman. The concern was that the Secretary of State might be taking on responsibilities which were unwise.
That is what those 15 union representatives told me today—that they feared that the Secretary of State would be breathing down the neck of British Telecom. The Secretary of State may laugh as I make these remarks, but I do not see why he should. I am describing the concern of my constituents. They may not have voted for me, but I still have to represent them, even at this late hour.
I told those constituents that they were too frightened about the work of British Telecom being diminished and about its being driven out of business by private competition. I asked "Why do you think British Telecom will disappear and Plessey, the IBM and the Japanese"—it is the Japanese that worry them most—"will take over?" [HON. MEMBERS: "What did they say?"] They asked what I thought. I said that they should not be frightened, that I had flown only twice with British Caledonian and perhaps 200 times with British Airways, and that was the measure of the "problem" of private competition.
The Bill is not irresponsible. It does not give the Secretary of State too much power. But it appears to do so. The concern expressed by trade unionists and by Labour Members—in more or less exaggerated speeches—arises because they read too much into it. Public and private sectors must work satisfactorily together. I support the mixed economy, but we must reassure those in the public sector that their work will not be reduced.
The people to whom I talked feared that they would be left only with telephone kiosks in villages. I said "You must be joking." They replied "No. Private enterprise will take over all the cities and we shall be left with the unprofitable areas."

Mr. Ioan Evans: rose—

Mr. Crouch: I shall not give way. The hon. Gentleman knows that it is normally my custom to do so.
I listened to the speech of the hon. Member for Bethnal Green and Bow (Mr. Mikardo) with interest. He and I worked together on the old Select Committee on Nationalised Industries. We really used to look at the nationalised industries then. The Post Office was not such an industry then. In some way, the hon. Member was expressing his concern that the nationalised industries should be able to exist in the mixed economy. He looks at things differently from me, but we on the Conservative Benches look upon the nationalised industries as an fact of life. They should be allowed to exist and provide not simply a public service but a service that can compete with any other service in the country. That is what British Telecom is aiming at.
I ask my right hon. Friend to bear in mind my short intervention. I am watching the clock and shall sit down soon. [Interruption.] If my hon. Friends cheer me too much, I may be longer. I was warned that I might be required to be here all night. When I am warned of that, I am ready to be here all night, on behalf of my constituents—even if, as in this case, there are only 15 of


them. [Interruption.] If I can still be heard by you, Mr. Deputy Speaker, because I am addressing my remarks to you since I know that they find no favour on either side of the House, I say that I am speaking tonight for 15 men and women who are concerned that there should be a future for British Telecommunications. As a Conservative, supporting the Bill—without the amendment to the clause—I ask for an assurance that British Telecommunications will continue in existence and will be a dominant factor in industry, competing with the private sector.

Mr. Cryer: What the hon. Member for Canterbury (Mr. Crouch) is saying is that, basically, there is a credibility gap around the Government. That sentiment would probably find many echoes on the Labour side of the House, particularly since the Minister of State, replying to the earlier part of the debate, referred to the public sector as "this damned lot". Those were his words. That is the sort of attitude that the Minister has.
I cannot imagine that the Minister would refer to multinational private corporations or small businesses as "this damned lot". It is just the public sector. It is hardly surprising that one of his colleagues should have 15 members of the POEU raising questions about what the Government intend to do with the public sector. They know that people in the Government, those who take the decisions, refer to the public sector with very great contempt indeed. The hon. Member for Canterbury was carrying out his duty in raising this issue and trying to penetrate the credibility gap of the Government.
Amendments Nos. 10, 11 and 12 refer to the telecommunications sector. In making his scandalously brief remarks to the House earlier, the Minister suggested that consumer choice would somehow increase. I support the amendments, but they hardly go far enough. They are extremely moderate and reasonable. They have been put forward in the vain hope that this dogmatic, vicious and hard-hearted Government might show one iota of flexibility. They do not rule out the possibility that the Post Office could make a decision about a certain degree of hiving off. However, the Government have rejected such a reasonable attitude.
1 am
If the Bill is enacted unamended, consumer choice will be limited. Amendment No. 12 would remove the following words from clause 6(6):
the Secretary of State shall not give any direction under this subsection unless he is satisfied that he will not thereby impede or prevent the proper discharge of the Corporation's duty under section 3(1).
It is right that that passage should be removed, because it it flatulent and meaningless.
Clause 3(1) states:
It shall be the duty of the Corporation (consistently with any directions given to it under the following provisions of this Part) so to exercise its powers as to provide throughout the British Islands (save in so far as they are provided by other persons or the provision thereof is, in its opinion, impracticable or not reasonably practicable) such telephone services as satisfy all reasonable demands for them.
When the Secretary of State exercises his discretion to direct the corporation to dispose of its assets, he must do so in conformity with clause 6(6)(b). In turn, that is qualified by clause 3(1), which, in essence, states that if it is not reasonably practicable to provide a telephone service it does not matter. Therefore, there will be discretion to discard something that is the pride of our

telephone service. No rural farmhouse or village has been deprived of a telephone service because of arbitrary high charging or because the Post Office has refused to provide a service. The Post Office has used its best endeavours to provide such services as part of its universal pattern. We have always been proud of that.
In some areas, the cost of providing such a service is extremely high. Many miles of cable may have to be laid and there may be difficulty of access. Nevertheless, a service has been provided. Those rural areas may be deprived of a telephone service because the corporation may say that it is impracticable or not reasonably practicable to provide one. There is no obligation on the Secretary of State to say that he cannot hive off these services because the Post Office's pattern of service might be disturbed.
The Post Office could say that it was not reasonably practicable to provide a telephone service in a certain area. There will be not a widening but a narrowing of consumer choice. That is implicit in the legislation. The idea is not that services to rural areas, far-flung farms and tiny hamlets that are 10 or 15 miles from a town should be sold but that services in city centres should be sold. That is where the money can be made. In city centres there is intense usage and low linage. Thus, the consumer will suffer because the profitable parts will be hived off.

Mr. Skinner: I have no quarrel with the argument that my hon. Friend is deploying about the rural services being depleted, but it is worth noting that apart from a few exceptions nearly all those rural areas are in constituencies held by Tories, by most of the Liberals, apart from the hon. Member for Liverpool, Edge Hill (Mr. Alton; and by a few of the Social Democrats. The constituencies of Labour Members are not affected, apart from that of my hon. Friend the Member for Berwick and East Lothian (Mr. Home Robertson).

Mr. Cryer: My hon. Friend has made an important point. It is interesting that in this part of the debate I was impelled to speak because the hon. Member for Canterbury raised the matter as a Conservative Member after his constituents had said that the Bill raised problems. He complained that the Government were not presenting the Bill in the correct light.
The fact is that the constituents of the hon. Member for Canterbury are correct. Many rural voters in Tory areas—

Mr. Bob Dunn: Only 15 representative.

Mr. Cryer: I am going wider than that. The hon. Member may feel some resentment at his hon. Friend raising constituency points, because he uttered that remark from a sedentary position in what I thought was a churlish growl. Nevertheless, the hon. Member for Canterbury was correct to raise the matter because many thousands—indeed, millions—of constituents of Tories do not realise what is happening behind their backs. The Tories are selling them out to multinational corporations.

Mr. Henderson: Talking of being aware, is the hon. Gentleman aware that the words to which he took exception in the Bill are a direct copy of the words in the Post Office Act 1969.

Mr. Cryer: I am grateful to the hon. Member. The fact that the same senior civil servants provide services for both Governments causes me grave concern. As my hon. Friend


the Member of Bolsover (Mr. Skinner) mentioned in his useful contribution, that is something that a future Labour Government have to show more determination about because we feel that these people have had too much influence. Perhaps some of the wording that was used was put in that Act with something in mind that was not entirely in accordance with Labour policy.

Mr. Allen McKay: Does my hon. Friend agree that this is a continuing attack on the rural areas? The Secretary of State for Education and Science creates a system that closes rural schools. The Secretary of State for Transport cuts transport from those areas, and the Chancellor of the Exchequer increases petrol by 20p. Therefore, it is a continuing attack.

Mr. Cryer: My hon. Friend is correct. His Penistone constituency covers a wide area and my hon. Friend understands the difficulties of both rural and urban areas and has been fighting hard, contrary to the Conservatives, against the erosion of rural areas. As he correctly points out, this provision is the latest in a long line of difficulties and attacks on the life of the rural dweller. I shall not be tempted along that path so graphically described by my hon. Friend, because there is another aspect of telecommunications that I wish to deal with—namely, research and development.
I want to deal with clause 6(8) in relation to the amendments that deal with hiving off. Clause 6(8) deals with technological research and development. If the Secretary of State directs that those sectors are hived off, the public will lose the benefits that have been achieved.

Mr. John Butcher: On a point of order, Mr. Deputy Speaker. Amendments Nos. 13 and 19 are in the following group of amendments.

Mr. Deputy Speaker (Mr. Ernest Armstrong): The hon. Member for Keighley (Mr. Cryer) is in order. Hiving off is relevant to these amendments.

Mr. Cryer: I am grateful to you, Mr. Deputy Speaker, for resisting the attempt which has been made to gag me.
The corporation is involved in research and development, and under the Bill the relevant sectors can be hived off at the Secretary of State's discretion. Amendments Nos. 10, 11 and 12 are designed to prevent that. The benefits of research and development should go to the community, and the telecommunication sector should remain intact to provide a service to the public.
We do not praise sufficiently the service given by our public sector industries. For political reasons, and because it wishes to discredit public industries, the press seizes on every failure and fails to mention the virtues and achievements of the public sector, and particularly British Telecom. We should praise our public telecommunications industry. The Government will hive off only a tiny profitable sector, which will be a disservice to the community.
Amendments Nos. 62, 63 and 64 deal with the traditional side of the business, with which we are all familiar—the Post Office. Telecommunications is the growth sector and, I suspect, will receive immediate consideration by the Secretary of State for sale. The Post Office, too, provides a fine service. We should recognise the work done by the members of the Union of

Communication Workers. In spite of the barrage of media criticism, motivated by the small number of people who own newspapers and want to discredit public ownership, our postal service is equal to or surpasses the best in the world.
My hon. Friends' amendments are as moderate and reasonable as those dealing with telecommunications. They adopt a flexible approach. They do not exclude the possibility of sale. My hon. Friends are trying desperately to arouse a glimmer of flexibility from the hard-faced and vicious-hearted Government, bent on their dogmatic wrecking of the public sector because of the domineering views of a domineering woman leading a weak and gutless Cabinet. That is the position that we face. My hon. Friends have put forward amendments that they thought might accord with the dripping views of the wets in the Government. This has not proved to be the case. It shows that we need to remain determined and to expect no compromise from the Government. The poor, the sick and the old will be trampled on.
1.15 am
Once again, the profitable sectors are to be hived off. I recall visiting, two or three years ago, the Keighley sorting office, where I encountered complaints similar to those made in this debate. The Yorkshire electricity board, albeit another publicly owned industry, was delivering its own bills in the urban centres. The rural areas, the distant hamlets and the awkard locations were left to the Post Office. There were grumbles because the Post Office felt that if it had to perform the hard work of delivering to the rural areas it sho:uld also have the easy and profitable sectors.
The provision in the Bill is of a kindred kind. It means that the Post Office, which, like all service industries, has faced considerable difficulties, exacerbated by the lunatic policies of the Government, now faces, along with the prospect of a downturn in business, the possibility that its most profitable sectors will be hived off to people who will not be accountable to the House. My view was that the Post Office should have remained a Government Department and, therefore, more answerable to the House. I did not agree with the Labour Government's decision that it should be turned into a business. I still do not agree. There should be accountability to the House.
There is some element of accountability, however slight, due to the relationship between the Post Ofice Corporation and the Government. If, however, any section is sold off to Securicor, what accountability will exist to the House? The Bill means a diminution of parliamentary accountability as well as a diminution in the performance and effectiveness of a service that has been provided, day in and day out and in all weathers, by Post Office workers. While the Government are busy selling off sections built up by the devotion to duty of postal workers, they do not hesitate to praise those postal workers who are vigilant in detecting letter bombs. At the same time as they are praising the workers for vigilance, they are eroding the services to which in many instances those workers have devoted their life's work.

Mr. Mikardo: In the block of flats in which I live there are 200-odd flats and it is possible to deliver to all of them in two hours. That is a profitable business compared with going out into the wilds of the country, and people will want to buy that part of the postal service. But there is another attraction, which arises from a matter that we


debated earlier. The private enterprise deliverer of letters will be able to promise his customers that their letters, unlike those delivered by the Post Office, will be free of interception, and of the likelihood of being opened and copied, because only letters delivered by the Post Office can be intercepted by the security services.

Mr. Cryer: My hon. Friend has made a very interesting point. It may be one of the reasons why the Secretary of State may use his powers under the clause to provide a non-intercepted service as an attraction. As my hon. Friend said earlier, there may well be advertisements saying "Use your local private postal service, because you can be safe from the Government snooper." It would not be beyond the Secretary of State to hive off in that way, using Government powers to push business into the private sector, making the difference between that and the Government sector an inducement.
If a part of the business is sold off it will be in the interests not of service but of profit. In the Post Office there is still the tradition of service of a Government Department, which was translated into a public corporation with the obligation to make a profit. That has been done, but once it becomes a private sector concern profit will become the overriding factor.
When there is an emphasis on profit and productivity, will letter bombs be so well detected as they have been in the Post Office? Will there be the safety and security that we have come to expect from the Post Office service? Of course, employees will use their best endeavours, but the main concern will no longer be public service. It will be profit, which will be increased by short cuts, dodges, clever advertising and other means.
I suppose that when we vote we shall find that the Tory Whips have done their work. I can only hope that the independent mind of the hon. Member for Canterbury will extend to his feet and that he will vote against this hiving-off provision and for the amendments.
It is sad that the Government should be pursuing this barmy course. There is one matter that they seem never to take into account; indeed, they do not care about it. I conclude where I started, with the Minister's comment on the public sector—"This damned lot". It does not matter to the Minister. He is a man about town. He is articulate. Before he became a Minister, no doubt he was a director of a few companies, as was the Secretary of State. He is not a person who lives by his own creed, or who has to face market forces. During the time that the Secretary of State has been in Parliament he has received lucrative incomes from outside.
What about the workers in the postal services whose futures the right hon. Gentleman is putting in doubt? Will their confidence in the future be improved as a result of his being given power to sell off the telecommunications sector and the postal sector? Will they wake up in the morning with a greater sense of belonging, or will their confidence be undermined by this legislation?
The Secretary of State and the other Ministers know that confidence of the working men and women in the Post Office is undermined by this legislation. That is why there was a lobby today of anxious people who came here to try to persuade the Government to change their minds. They want a decent future for the industry in which they work. But this Government will not be convinced by those working men and women. They do not have the level of incomes of the Government Ministers who are making this

decision. Those working men and women, who are worth a thousand of this rotten Government, are being undermined. This measure is utterly contemptible, because it attacks the very people who provide the service. The Government do not care about them.

Mr. Ioan Evans: I was provoked into making a brief intervention in the debate when I heard the Minister's slashing attack on public industries in general. What finally made up my mind was the contribution of the hon. Member for Canterbury (Mr. Crouch). He told us about the representations that had been made to him by the trade unionists who came to see him today—a modern "Canterbury Tales".
We all had representations made to us today. People came here today from Wales. After listening to the hon. Member's speech about Canterbury, I decided that we on the Opposition Benches, too, should take the opportunity of this debate to express the feelings put to us by trade unionists today. It was a tremendous lobby. It was well organised by both the main Post Office unions. Unfortunately, for some reason some Government Members did not meet the union representatives, who gave cogent and compelling reasons why the Government should withdraw the Bill. If those Conservative Members had heard the arguments I am sure that they would join us in the Lobby tonight.
This debate is about the hiving off of parts of the industry. The Bill's purpose is to separate the postal and telecommunications sides, which I believe is basically wrong. Certainly, the Carter report recommended that the postal and telecommunications sides should be separated, but the postal side is labour-intensive while the telecommunications side is capital-intensive. It has been argued that we could have a publicly owned postal side and a publicly owned telecommunications side, but I believe that it would be better to keep them within one corporation, because the tremendous profits from the developing telecommunications business could be ploughed back into the corporation to ensure that we had a cheap postal service.
1.30 am
The Government have adopted the Carter report recommendation and are separating the industries, but we should at least try to ensure that they are maintained under public ownership. The Government obviously intend to hive off the profitable activities to the private sector and to retain only the less profitable elements in public ownership. That may be all right for the entrepreneurs who will make a packet, but they will make their profits at the expense of the rest of business in this country.
We are in the worst financial mess that the country has known and 364 university economics professors have questioned what the Government are doing. What relevance has the Bill to the situation facing us. I hope that my right hon. and hon. Friends will maintain their opposition to the Bill and will ensure that when we return to power—[Interruption.] The hon. Member for Watford (Mr. Garel-Jones) laughs, but he should look to his majority. Any Tory Member with a majority of less than 15,000 is in a marginal seat. The hon. Member may be depending on boundary changes but all the boundary changes in the world will not enable him to get re-elected. The Government are attacking Post Office workers and by supporting the Government the hon. Member for Watford is taking action that is to the detriment of those workers.


He and his right hon. and hon. Friends should remember that Post Office workers knock on every door in their constituencies and have a great deal of contact with the people.
Given all the financial, industrial, economic and social problems facing the country, it is deplorable that the Government should have introduced such an irrelevant Bill. I hope that even at this late stage they will have second thoughts. The Minister for Industry and Information Technology is one of the more reasonable Conservative Members—comparaitively speaking—and one would have thought that when he joined the Secretary of State at the Department of Industry—

Mr. Deputy Speaker: Order. The hon. Gentleman must relate his remarks to the amendment.

Mr. Evans: We are dealing with the powers of the Secretary of State, and the Minister for Industry and Information Technology may become Secretary of State. He may take on the tremendous powers in clause 6:
The Secretary of State may, after consultation with the Corporation, give to it such directions of a general character as to the exercise by it of its powers as appear to the Secretary of State to be requisite in the national interest.
The Bill is against the national interest. Did any Conservative Members tell their Post Office worker constituents that they would introduce such a Bill? They did not. But the Secretary of State was preparing the documents. When the Minister of State entered the Department it was hoped that sense would prevail and that he would curb the Secretary of State. But today he has tried to justify the hiving off. He did not have his heart in what he said. In effect, he said that the Secretary of State would not be daft enough to implement the powers. We are not so sure about that.
My hon. Friends on the Front Bench are anxious to make progress, but I believe that we should fight the issue. The Government want to push the legislation through. There is massive opposition to it by Post Office workers. We would be failing in our duty if we did not express the bitterness, anger and disappointment felt by Post Office workers about this miserable Bill and the Government's miserable move to hive off profitable sectors of the industry. We experienced 13 years of Conservative Government. Even previous—

Mr. Deputy Speaker: Order. The hon. Gentleman is straying a long way from the amendment. He must not discuss the Bill in general. He must deal with the amendment.

Mr. Evans: I am trying to relate my remarks to the Secretary of State's powers. I am relating the hiving-off powers to the Government's general policy. They are trying to privatise industry. Government Members do not realise the full implications. If they, like the hon. Member for Canterbury, had met the trade unionists who came here today, they would know that those people are concerned not merely about their employment but about the national interest. It is impertinent of the Minister to talk about the national interest, because the Bill is against the national interest. The amendments are in the national interest. We must minimise the damage that can be inflicted by the Secretary of State on the Post Office.

Mr. Ray Mawby: rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put:—

The House divided: Ayes 122, Noes 192.

Division No. 134]
[1.40 am


AYES


Alton, David
McNair-Wilson, M. (N 'bury)


Beith, A. J.
McNair-Wilson, P. (New F'st)


Bonsor, Sir Nicholas
McQuarrie, Albert


Bowden, Andrew
Madel, David


Boyson, Dr Rhodes
Major, John


Bright, Graham
Marlow, Tony


Brinton, Tim
Marshall, Michael (Arundel)


Bryan, Sir Paul
Marten, Neil (Banbury)


Bulmer, Esmond
Maude, Rt Hon Sir Angus


Burden, Sir Frederick
Mawby, Ray


Butcher, John
Mawhinney, Dr Brian


Carlisle, Kenneth (Lincoln)
Maxwell-Hyslop, Robin


Chalker, Mrs. Lynda
Mellor, David


Chapman, Sydney
Meyer, Sir Anthony


Clark, Hon A. (Plym'th, S'n)
Mills, Iain (Meriden)


Costain, Sir Albert
Moate, Roger


Cranborne, Viscount
Morris, M. (N'hampton S)


Dover, Denshore
Murphy, Christopher


Dunn, Robert (Dartford)
Needham, Richard


Durant, Tony
Neubert, Michael


Eden, Rt Hon Sir John
Page, Richard (SW Herts)


Eggar, Tim
Parris, Matthew


Faith, Mrs Sheila
Pawsey, James


Fanner, Mrs Peggy
Penhaligon, David


Finsberg, Geoffrey
Porter, Barry


Fletcher, A. (Ed'nb'gh N)
Pym, Rt Hon Francis


Fookes, Miss Janet
Ridley, Hon Nicholas


Fowler, Rt Hon Norman
Rost, Peter


Fraser, Peter (South Angus)
Royle, Sir Anthony


Garel-Jones, Tristan
Sainsbury, Hon Timothy


Gilmour, Rt Hon Sir Ian
Shelton, William (Streatham)


Gow, Ian
Shepherd, Colin (Hereford)


Gower, Sir Raymond
Shepherd, Richard


Grant, Anthony (Harrow C)
Silvester, Fred


Gray, Hamish
Sims, Roger


Greenway, Harry
Speller, Tony


Griffiths, E. (B'y St. Edm' ds)
Spicer, Jim (West Dorset)


Griffiths, Peter Portsm'th N)
Sproat, Iain


Hamilton, Hon A.
Stanbrook, Ivor


Hamilton, Michael (Salisbury)
Steel, Rt Hon David


Hastings, Stephen
Stevens, Martin


Hayhoe, Barney
Stewart, Ian (Hitchin)


Heddle, John
Stewart, A.(E Renfrewshire)


Hicks, Robert
Stokes, John


Hill, James
Taylor, Robert (Croydon NW)


Hogg, Hon Douglas (Gr'th'm)
Taylor, Teddy (S' end E)


Holland, Philip (Carlton)
Temple-Morris, Peter


Hooson, Tom
Thatcher, Rt Hon Mrs M.


Howell, Rt Hon D. (G 'ldf'd)
Trotter, Neville


Irving, Charles (Cheltenham)
Vaughan, Dr Gerard


Jenkin, Rt Hon Patrick
Waddington, David


Jessel, Toby
Waldegrave, Hon William


Johnston, Russell (Inverness)
Walker, B, (Perth)


Kaberry, Sir Donald
Wells, Bowen


Kellett-Bowman, Mrs Elaine
Whitelaw, Rt Hon William


Knox, David
Wickenden, Keith


Lang, Ian
Wilkinson, John


Lawrence, Ivan
Williams, D.(Montgomery)


Lennox-Boyd, Hon Mark
Wolfson, Mark


Lewis, Kenneth (Rutland)
Young, Sir George (Acton)


Lloyd, Ian (Havant &amp; W'loo)



Lloyd, Peter (Fareham)
Tellers for the Ayes:


Loveridge, John
Mr. Spencer Le Marchant and Mr. Carol Mather.


Macmillan, Rt Hon M.





NOES


Adams, Allen
Bennett, Andrew (St 'kp't N)


Allaun, Frank
Bidwell, Sydney


Anderson, Donald
Booth, Rt Hon Albert


Archer, Rt Hon Peter
Boothroyd, Miss Betty


Ashton, Joe
Bray, Dr Jeremy


Atkinson, N.(H' gey,)
Brown, Hugh D. (Provan)


Barnett, Guy (Greenwich)
Brown, R. C. (N' castle W)


Barnett, Rt Hon Joel (H'wd)
Brown, Ron (E' burgh, Leith)


Benn, Rt Hon A. Wedgwood
Brown, Ronald W. (H' ckn' y S)






Callaghan, Rt Hon J.
Field, Frank


Callaghan, Jim (Midd't'n &amp; P)
Flannery, Martin


Campbell, Ian
Fletcher, Ted (Darlington)


Campbell-Savours, Dale
Ford, Ben


Cant, R. B.
Forrester, John


Carmichael, Neil
Foster, Derek


Clark, Dr David (S Shields)
Foulkes, George


Cocks, Rt Hon M. (B'stol S)
Fraser, J. (Lamb 'th, N' w 'd)


Coleman, Donald
Freeson, Rt Hon Reginald


Cook, Robin F.
Garrett, John (Norwich S)


Cowans, Harry
George, Bruce


Cox, T. (W' dsw'th, Toot' g)
Gilbert, Rt Hon Dr John


Crowther, J. S.
Golding, John


Cryer, Bob
Graham, Ted


Cunliffe, Lawrence
Grant, George (Morpeth)


Cunningham, G. (Islington S)
Grant, John (Islington C)


Dalyell, Tam
Hamilton, James (Bothwell)


Davidson, Arthur
Hamilton, W, W. (C' tral Fife)


Davies, Rt Hon Denzil (L'lli)
Hardy, Peter


Davies, Ifor (Gower)
Harrison, Rt Hon Walter


Davis, T. (B'ham, Stechf'd)
Hart, Rt Hon Dame Judith


Deakins, Eric
Hattersley, Rt Hon Roy


Dean, Joseph (Leeds West)
Haynes, Frank


Dempsey, James
Hogg, N. (E Dunb't' nshire)


Dewar, Donald
Holland, S. (L'b'th, Vauxh'll)


Dixon, Donald
Home Robertson, John


Dobson, Frank
Homewood, William


Dormand, Jack
Hooley, Frank


Douglas, Dick
Huckfield, Les


Douglas-Mann, Bruce
Hudson Davies, Gwilym E.


Dubs, Alfred
Hughes, Robert (Aberdeen N)


Duffy, A. E. P.
Hughes, Roy (Newport)


Dunnett, Jack
Janner, Hon Greville


Dunwoody, Hon Mrs G.
Jay, Rt Hon Douglas


Eadie, Alex
John, Brynmor


Eastham, Ken
Johnson, James (Hull West)


Ellis, R. (NE D'bysh're)
Jones, Barry (East Flint)


English, Michael
Jones, Dan (Burnley)


Ennals, Rt Hon David
Kaufman, Rt Hon Gerald


Evans, Ioan (Aberdare)
Kilroy-Silk, Robert


Evans, John (Newton)
Lamond, James


Leadbitter, Ted
Richardson, Jo


Leighton, Ronald
Roberts, Allan (Bootle)


Lewis, Ron (Carlisle)
Roberts, Ernest (Hackney N)


Litherland, Robert
Roberts, Gwilym (Cannock)


Lofthouse, Geoffrey
Robertson, George


Lyons, Edward (Bradf'd W)
Robinson, G. (Coventry NW)


Mabon, Rt Hon Dr J. Dickson
Rooker, J. W.


Mc Cartney, Hugh
Ross, Ernest (Dundee West)


Mc Donald, Dr Oonagh
Rowlands, Ted


Mc Elhone, Frank
Ryman, John


Mc Guire, Michael (Ince)
Sheerman, Barry


Mc Kelvey, William
Sheldon, Rt Hon R.


MacKenzie, Rt Hon Gregor
Shore, Rt Hon Peter


Mc Nally, Thomas
Short, Mrs Renée


Mc Namara, Kevin
Silkin, Rt Hon J. (Deptford)


Mc Taggart, Robert
Silverman, Julius


Mc William, John
Skinner, Dennis


Magee, Bryan
Snape, Peter


Marshall, Dr Edmund (Goole)
Soley, Clive


Marshall, Jim (Leicester S)
Spearing, Nigel


Martin, M (G' gow S'burn)
Spriggs, Leslie


Maxton, John
Stallard, A. W.


Mikardo, Ian
Stewart, Rt Hon D. (W Isles)


Millan, Rt Hon Bruce
Stoddart, David


Mitchell, Austin (Grimsby)
Stott, Roger


Morris, Rt Hon C. (O'shaw)
Strang, Gavin


Morris, Rt Hon J. (Aberavon)
Straw, Jack


Moyle, Rt Hon Roland
Summerskill, Hon Dr Shirley


Oakes, Rt Hon Gordon
Taylor, Mrs Ann (Bolton W)


O'Halloran, Michael
Thomas, Dafydd (Merioneth)


O'Neill, Martin
Thomas, Jeffrey (Abertillery)


Orme, Rt Hon Stanley
Thomas, Dr R. (Carmarthen)


Pavitt, Laurie
Thorne, Stan (Preston South)


Pendry, Tom
Tilley, John


Powell, Raymond (Ogmore)
Tinn, James


Price, C. (Lewisham W)
Urwin, Rt Hon Tom


Race, Reg
Varley, Rt Hon Eric G.


Rees, Rt Hon M (Leeds S)
Wainwright, E.(Dearne V)





Walker, Rt Hon H. (D' caster)
Winnick, David


Watkins, David
Woodall, Alec


Welsh, Michael
Woolmer, Kenneth


White, Frank R.
Wright, Sheila


White, J. (G' gow Pollok)
Young, David (Bolton E)


Whitehead, Phillip



Whitlock, William
Tellers for the Noes:


Williams, Rt Hon A. (S' sea W)
Mr. Allan Mc Kay and Mr. George Morton.


Wilson, Gordon (Dundee E)



Wilson, Rt Hon Sir H.(H' ton)



Wilson, William (C' try SE)

Question accordingly negatived.

Question put, That the amendment be made:—

The House divided: Ayes 193, Noes 280.

Division No. 135]
[1.53 am


AYES


Adams, Allen
Ford, Ben


Allaun, Frank
Forrester, John


Anderson, Donald
Foster, Derek


Archer, Rt Hon Peter
Foulkes, George


Ashton, Joe
Fraser, J. (Lamb'th, N'w'd)


Atkinson, N. (H' gey,)
Freeson, Rt Hon Reginald


Barnett, Guy (Greenwich)
Garrett, John (Norwich S)


Barnett, Rt Hon Joel (H'wd)
George, Bruce


Benn, Rt Hon A. Wedgwood
Gilbert, Rt Hon Dr John


Bennett, Andrew(St'kp't N)
Golding, John


Bidwell, Sydney
Graham, Ted


Booth, Rt Hon Albert
Grant, George (Morpeth)


Boothroyd, Miss Betty
Grant, John (Islington C)


Bray, Dr Jeremy
Hamilton, James (Bothwell)


Brown, Hugh D. (Provan)
Hamilton, W. W. (C'tral Fife)


Brown, R. C. (N'castle W)
Hardy, Peter


Brown, Ron (E'burgh, Leith)
Harrison, Rt Hon Walter


Brown, Ronald W. (H 'ckn'y S)
Hart, Rt Hon Dame Judith


Callaghan, Rt Hon J.
Hattersley, Rt Hon Roy


Callaghan, Jim (Midd't' n &amp; P)
Haynes, Frank


Campbell, Ian
Hogg, N. (E Dunb't'nshire)


Campbell-Savours, Dale
Holland, S. (L'b'th, Vauxh'll)


Cant, R. B.
Home Robertson, John


Carmichael, Neil
Homewood, William


Clark, Dr David (S Shields)
Hooley, Frank


Cocks, Rt Hon M. (B'stol S)
Huckfield, Les


Coleman, Donald
Hudson Davies, Gwilym E.


Cook, Robin F.
Hughes, Robert (Aberdeen N)


Cowans, Harry
Hughes, Roy (Newport)


Cox, T. (W'dsw'th, Toot'g)
Janner, Hon Greville


Crowther, J. S.
Jay, Rt Hon Douglas


Cryer, Bob
John, Brynmor


Cunliffe, Lawrence
Johnson, James (Hull West)


Cunningham, G. (Islington S)
Jones, Barry (East Flint)


Dalyell, Tam
Jones, Dan (Burnley)


Davidson, Arthur
Kaufman, Rt Hon Gerald


Davies, Rt Hon Denzil (L'lli)
Kilroy-Silk, Robert


Davies, Ifor (Gower)
Lamond, James


Davis, T. (B'ham, Stechfd)
Leadbitter, Ted


Deakins, Eric
Leighton, Ronald


Dean, Joseph (Leeds West)
Lewis, Ron (Carlisle)


Dempsey, James
Litherland, Robert


Dewar, Donald
Lofthouse, Geoffrey


Dixon, Donald
Lyons, Edward (Bradf'd W)


Dobson, Frank
Mabon, Rt Hon Dr J. Dickson


Dormand, Jack
Mc Donald, Dr Oonagh


Douglas, Dick
Mc Elhone, Frank


Douglas-Mann, Bruce
Mc Guire, Michael (Ince)


Dubs, Alfred
Mc Kay, Allen (Penistone)


Duffy, A. E. P.
Mc Kelvey, William


Dunnett, Jack
Mac Kenzie, Rt Hon Gregor


Dunwoody, Hon Mrs G.
Mc Nally, Thomas


Eadie, Alex
Mc Namara, Kevin


Eastham, Ken
Mc Taggart, Robert


Ellis, R. (NE D'bysh're)
Mc William, John


English, Michael
Magee, Bryan


Ennals, Rt Hon David
Marshall, Dr Edmund (Goole)


Evans, Ioan (Aberdare)
Marshall, Jim (Leicester S)


Evans, John (Newton)
Martin, M(G'gow S'burn)


Field, Frank
Maxton, John


Flannery, Martin
Mikardo, Ian


Fletcher, Ted (Darlington)
Millan, Rt Hon Bruce






Mikardo, Ian
Stallard, A. W.


Millan, Rt Hon Bruce
Stewart, Rt Hon D. (W Isles)


Mitchell, Austin (Grimsby)
Stoddart, David


Morris, Rt Hon C. (O'shaw)
Stott, Roger


Morris, Rt Hon J. (Aberavon)
Strang, Gavin


Morton, George
Straw, Jack


Moyle, Rt Hon Roland
Summerskill, Hon Dr Shirley


Oakes, Rt Hon Gordon
Taylor, Mrs Ann (Bolton W)


O'Halloran, Michael
Thomas, Dafydd (Merioneth)


O'Neill, Martin
Thomas, Jeffrey (Abertillery)


Orme, Rt Hon Stanley
Thomas, Dr R. (Carmarthen)


Pavitt, Laurie
Thorne, Stan (Preston South)


Pendry, Tom
Tilley, John


Powell, Raymond (Ogmore)
Tinn, James


Price, C. (Lewisham W)
Urwin, Rt Hon Tom


Race, Reg
Varley, Rt Hon Eric G.


Rees, Rt Hon M (Leeds S)
Wainwright, E. (Dearne V)


Richardson, Jo
Walker, Rt Hon H. (D'caster)


Roberts, Allan (Bootle)
Watkins, David


Roberts, Ernest (Hackney N)
Welsh, Michael


Roberts, Gwilym (Cannock)
White, J. (G'gow Pollok)


Robertson, George
Whitehead, Phillip


Robinson, G. (Coventry NW)
Whitlock, William


Rooker, J. W.
Williams, Rt Hon A. (S'sea W)


Ross, Ernest (Dundee West)
Wilson, Gordon (Dundee E)


Rowlands, Ted
Wilson, Rt Hon Sir H. (H'ton)


Ryman, John
Wilson, William (C'try SE)


Sheerman, Barry
Winnick, David


Sheldon, Rt Hon R.
Woodall, Alec


Shore, Rt Hon Peter
Woolmer, Kenneth


Short, Mrs Renée
Wrigglesworth, Ian


Silkin, Rt Hon J. (Deptford)
Wright, Sheila


Silverman, Julius
Young, David (Bolton E)


Skinner, Dennis



Snape, Peter
Tellers for the Ayes:


Soley, Clive
Mr. Frank R. White and Mr. Hugh Mc Cartney 


Spearing, Nigel



Spriggs, Leslie





NOES


Aitken, Jonathan
Buck, Antony


Alexander, Richard
Budgen, Nick


Alison, Michael
Bulmer, Esmond


Alton, David
Butcher, John


Amery, Rt Hon Julian
Carlisle, John (Luton West)


Ancram, Michael
Carlisle, Kenneth (Lincoln)


Arnold, Tom
Chalker, Mrs. Lynda


Aspinwall, Jack
Channon, Rt. Hon. Paul


Atkins, Rt Hon H. (S'thorne)
Chapman, Sydney


Atkins, Robert (Preston N)
Churchill, W. S.


Atkinson, David (B'm'th, E)
Clark, Hon A. (Plym'th, S'n)


Baker, Kenneth (St. M'bone)
Clark, Sir W. (Croydon S)


Baker, Nicholas (N Dorset)
Clarke, Kenneth (Rushcliffe)


Banks, Robert
Clegg, Sir Walter


Beaumont-Dark, Anthony
Cockeram, Eric


Beith, A. J.
Cope, John


Bendall, Vivian
Corrie, John


Bennett, Sir Frederic (T'bay)
Costain, Sir Albert


Benyon, Thomas (A'don)
Cranborne, Viscount


Benyon, W. (Buckingham)
Critchley, Julian


Best, Keith
Crouch, David


Bevan, David Gilroy
Dean, Paul (North Somerset)


Biffen, Rt Hon John
Dorrell, Stephen


Biggs-Davison, John
Douglas-Hamilton, Lord J.


Blackburn, John
Dover, Denshore


Bonsor, Sir Nicholas
du Cann, Rt Hon Edward


Boscawen, Hon Robert
Dunn, Robert (Dartford)


Bottomley, Peter (W'wich W)
Durant, Tony


Bowden, Andrew
Dykes, Hugh


Boyson, Dr Rhodes
Eden, Rt Hon Sir John


Braine, Sir Bernard
Eggar, Tim


Bright, Graham
Fairbairn, Nicholas


Brinton, Tim
Faith, Mrs Sheila


Brittan, Leon
Fenner, Mrs Peggy


Brooke, Hon Peter
Finsberg, Geoffrey


Brotherton, Michael
Fisher, Sir Nigel


Brown, Michael (Brigg &amp; Sc'n)
Fletcher, A. (Ed'nb'gh N)


Browne, John (Winchester)
Fletcher-Cooke, Sir Charles


Bruce-Gardyne, John
Fookes, Miss Janet


Bryan, Sir Paul
Forman, Nigel





Fowler, Rt Hon Norman
Marlow, Tony


Fox, Marcus
Marshall, Michael (Arundel)


Fraser, Peter (South Angus)
Marten, Neil (Banbury)


Fry, Peter
Mates, Michael


Gardiner, George (Reigate)
Maude, Rt Hon Sir Angus


Gardner, Edward (S Fylde)
Mawby, Ray


Garel-Jones, Tristan
Mawhinney, Dr Brian


Gilmour, Rt Hon Sir Ian
Maxwell-Hyslop, Robin


Glyn, Dr Alan
Mayhew, Patrick


Goodlad, Alastair
Mellor, David


Gorst, John
Meyer, Sir Anthony


Gow, Ian
Miller, Hal (B'grove)


Gower, Sir Raymond
Mills, Iain (Meriden)


Grant, Anthony (Harrow C)
Mills, Peter (West Devon)


Gray, Hamish
Miscampbell, Norman


Greenway, Harry
Moate, Roger


Griffiths, E. (B'y St. Edm'ds)
Monro, Hector


Griffiths, Peter Portsm'th N)
Montgomery, Fergus


Grist, Ian
Moore, John


Grylls, Michael
Morgan, Geraint


Gummer, John Selwyn
Morris, M. (N'hampton S)


Hamilton, Hon A.
Morrison, Hon C. (Devizes)


Hamilton, Michael (Salisbury)
Morrison, Hon P. (Chester)


Hampson, Dr Keith
Mudd, David


Hannam, John
Murphy, Christopher


Haselhurst, Alan
Neale, Gerrard


Hastings, Stephen
Needham, Richard


Havers, Rt Hon Sir Michael
Nelson, Anthony


Hawkins, Paul
Neubert, Michael


Hawksley, Warren
Newton, Tony


Hayhoe, Barney
Onslow, Cranley


Heddle, John
Oppenheim, Rt Hon Mrs S.


Henderson, Barry
Osborn, John


Heseltine, Rt Hon Michael
Page, Rt Hon Sir G. (Crosby)


Hicks, Robert
Page, Richard (SW Herts)


Hill, James
Parris, Matthew


Hogg, Hon Douglas (Gr'th'm)
Patten, Christopher (Bath)


Holland, Philip (Carlton)
Pawsey, James


Hooson, Tom
Penhaligon, David


Hordern, Peter
Percival, Sir Ian


Howe, Rt Hon Sir Geoffrey
Pink, R. Bonner


Howell, Rt Hon D. (G'ldf'd)
Pollock, Alexander


Howell, Ralph (N Norfolk)
Porter, Barry


Hunt, David (Wirral)
Price, Sir David (Eastleigh)


Irving, Charles (Cheltenham)
Proctor, K. Harvey


Jenkin, Rt Hon Patrick
Pym, Rt Hon Francis


Jessel, Toby
Raison, Timothy


Johnston, Russell (Inverness)
Rathbone, Tim


Jopling, Rt Hon Michael
Rees-Davies, W. R.


Joseph, Rt Hon Sir Keith
Renton, Tim


Kaberry, Sir Donald
Rhodes James, Robert


Kellett-Bowman, Mrs Elaine
Rhys Williams, Sir Brandon


Kershaw, Anthony
Ridley, Hon Nicholas


King, Rt Hon Tom
Rifkind, Malcolm


Knight, Mrs Jill
Roberts, Wyn (Conway)


Knox, David
Ross, Wm. (Londonderry)


Lamont, Norman
Rost, Peter


Lang, Ian
Royle, Sir Anthony


Latham, Michael
Sainsbury, Hon Timothy


Lawrence, Ivan
St. John-Stevas, Rt Hon N.


Lawson, Rt Hon Nigel
Scott, Nicholas


Lee, John
Shaw, Giles (Pudsey)


Lennox-Boyd, Hon Mark
Shelton, William (Streatham)


Lester, Jim (Beeston)
Shepherd, Colin (Hereford)


Lewis, Kenneth (Rutland)
Shepherd, Richard


Lloyd, Ian (Havant &amp; W'loo)
Shersby, Michael


Lloyd, Peter (Fareham)
Silvester, Fred


Loveridge, John
Sims, Roger


Luce, Richard
Skeet, T. H. H.


Lyell, Nicholas
Smith, Dudley


Mc Crindle, Robert
Speed, Keith


Mac Gregor, John
Speller, Tony


MacKay, John (Argyll)
Spicer, Jim (West Dorset)


Macmillan, Rt Hon M.
Spicer, Michael (S Worcs)


McNair-Wilson, M. (N'bury)
Sproat, Iain


McNair-Wilson, P. (New F'st)
Squire, Robin


McQuarrie, Albert
Stanbrook, Ivor


Madel, David
Stanley, John


Major, John
Steel, Rt Hon David


Marland, Paul
Steen, Anthony






Stevens, Martin
Walker, B. (Perth)


Stewart, Ian (Hitchin)
Waller, Gary


Stewart, A. (E Renfrewshire)
Ward, John


Stokes, John
Warren, Kenneth


Stradling Thomas, J.
Watson, John


Taylor, Robert (Croydon NW)
Wells, John (Maidstone)


Taylor, Teddy (S'end E)
Wells, Bowen


Temple-Morris, Peter
Wheeler, John


Thatcher, Rt Hon Mrs M.
Whitelaw, Rt Hon William


Thomas, Rt Hon Peter
Whitney, Raymond


Thompson, Donald
Wickenden, Keith


Thorne, Neil (Ilford South)
Wiggin, Jerry


Thornton, Malcolm
Wilkinson, John


Townend, John (Bridlington)
Williams, D.(Montgomery)


Townsend, Cyril D, (B'heath)
Winterton, Nicholas


Trippier, David
Wolfson, Mark


Trotter, Neville
Young, Sir George (Acton)


van Straubenzee, W. R.
Younger, Rt Hon George


Vaughan, Dr Gerard



Waddington, David
Tellers for the Noes:


Wakeham, John
Mr. Spencer le Marchant and Mr. Carol Mather.


Waldegrave, Hon William

Question accordingly negatived.

Amendments made: No. 101 in page 9, line 26, leave out from beginning to 'to' in line 28 and insert—

'(a) to make a scheme under subsection (1) of section 4, or to exercise its powers under subsection (4) of that section, for such purposes and in such manner as may be specified in the direction; or
(b)to dispose of any part of its undertaking or any assets held by it or'.

No. 102, in page 9, line 32, leave out 'this subsection' and insert 'paragraph (b)'.

No. 103, in page 9, line 35, at end insert—
'(6A) The Secretary of State shall lay before each House of Parliament a copy of every direction given under subsection (6) unless he is of opinion that disclosure of the direction is against—

(a) the interests of national security; or
(b) the commercial interests of any person.'.

No. 104, in page 9, line 36, leave out 'directions' and insert 'direction'.

No. 105, in page 9, line 38, leave out from second 'that' to end of line 39 and insert
'disclosure of the direction is against—

(a) the interests of national security; or
(b)the commercialinterests of a person other than the Corporation and its wholly owned subsidiaries. '.—[Sir Keith Joseph.]

Mr. Orme: I beg to move amendment No. 13, in page, 9, leave out lines 40 to 46.
I understand that with this we may discuss amendment No. 99, in page 9, line 45, leave out from 'matters' to end of line 46.
Amendment No. 13 deals with research and development carried out by the British telecommunications industry. In clause 6(8) the Secretary of State takes powers unto himself. The subsection provides:
The Corporation shall settle from time to time, after consultation with the Secretary of State, a general programme of technological research into matters affecting the services provided by it or its wholly owned subsidiaries and other matters affecting its or their functions,
The subsection goes on in that vein. It means that the Secretary of State is taking powers directly to intervene in research and development carried out by British telecommunications.
The research programme carried out so far by the British telecommunications industry under public ownership has been of an outstanding character. It has created centres of excellence. The development of modern technology by the industry has put it at the forefront of the world's telecommunications industries.
Telecommunications will play an increasingly important part in our future. They will dominate technology for the rest of the century. It is essential that the British industry should maintain its prime position. If it does not, it will be vulnerable to overseas penetration and may well be overtaken by developments elsewhere.
I pay tribute to the case made in Committee by my hon. Friend the Member for Ipswich (Mr. Weetch). I understand that one of the key centres, at Martlesharn, is in his constituency. The work coming out of this centre is of vital importance to the industry.
One of the problems with British industry, both private and public, is that we have not paid sufficient attention to research and development over the past 25 to 30 years. There are many instances of Britain being first with an idea, an invention, with new technology, but then failing to make the money available for essential development. We have not followed through. The telecommunications industry takes 95 per cent. of its requirements from our domestic industries and thereby provides a good deal of work. This is an example of frontier-crossing between the public and private sectors. Here we have a publicly owned industry which has created work in the private sector. This will increasingly be the case in the future.
We are disturbed to learn that the Secretary of State feels it necessary to take these powers. We see them as an interference. The Secretary of State is not an authority on the technology. He will have to be advised by departmental experts. I do not think that there are many experts to advise him on some of the new technology.
We see this move, as set out in the subsection, as a method of implementing cash limits in the telecommunications industry. We feel that subsection (8) is unnecessary. We should like to know from the Under-Secretary of State for Industry when he replies what is meant by the words
shall settle from time to time".
How much interest will the Secretary of State take in this? Will there be regular interference and demands for reports? Will not this unsettle crucial research and development? We are concerned that we should not lose the impetus of this new technology. There are examples of instances when we have done so. For instance, television tubes are no longer produced in the United Kingdom. They have to be imported. We are concerned about this multi-million pound industry which creates a great deal of wealth and provides much employment.
In columns 163 and 164 of the Official Report, Standing Committee B on 20 January 1981 my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) made a strong case for the industry. He gave examples of developments such as system X, TXE4 and other exciting developments. We want an assurance from the Minister about this subsection. We are worried about the proposed interference of the Secretary of State.

Mr. Mikardo: I beg to move, That the debate be now adjourned.
I wish to know the Government's intentions towards our proceedings. We have been at it for nearly 11 hours. We have had a series of good debates. I have a right to say that, because I have been here for all 11 hours, apart from 35 minutes when I had to carry out some necessary natural functions. During that time we have dealt with seven new clauses, five of which were Government proposals and only two Opposition ones. We have dealt with 31


amendments of which 23 were Government amendments and only eight Opposition ones. We have devoted about three-quarters of the time to Goverment-sponsored proposals. Some were kindly tabled by the Minister and his colleagues in fulfilment of obligations undertaken in Committee. We are all grateful for that. Nevertheless, we have been discussing more Government than Opposition business.
Even the young ones like me are a little past their best. Some of the older ones who came into the Chamber only just before midnight, and who have not learnt to stand their prandial delights as well as they will do later, are much more tired than I am. All of us are a little past our best. There is some important business to come, including the amendments, now before us. We must still discuss the important subjects of research and development, licensing, and cash limits. Several provisions relating to telephone tapping must be put to the vote, although they will be taken formally as they have already been debated. The postal monopoly has yet to be discussed.
We have not even begun to debate the third Bill. It has already been said that the Bill is really three Bills in one—a Post Office Bill, a British Telecommunications Bill and a Cable and Wireless Bill. We have not even begun to debate Cable an Wireless Ltd. Indeed, we must wait until clause 77 to discuss that, and that is a long time ahead.
I am sure that the Government will agree that we shall not do justice to the Bill if we continue now. No doubt the Government's business managers would like to dispose of the Report stage now; I can understand that. However, on a rough estimate of Mr. Speaker's provisional selection of amendments, we have completed between one-quarter and one-third of the work in just under 11 hours. If that assessment is anywhere near correct we shall not complete the Bill even if we continue our debates until after the normal starting time for Thursday's business.
The Government may find that they are in the worst of all possible worlds, because they will have kept their supporters and Opposition Members up until a late hour without achieving their objective of completing the Report stage in one sitting. No one has been filibustering, or messing about. We have been dealing honestly and fairly with the work before us. If we cannot complete our work in a single sitting, is there any point in keeping hon. Members here much longer at this hour of the morning?
I beg the Minister to understand that I am making these points genuinely and in a spirit of helpfulness. I am not trying to make points at anyone's expense. I am trying to be practical. I am sure that if the Government think about what I have said they will realise that the analysis that I have made of the potentialities for the remainder of the sitting are valid and realistic. I hope that they will react accordingly.

Mr. Alton': I support the hon. Member for Bethnal Green and Bow (Mr. Mikardo). I think that the Minister and other members of the Government should give serious consideration to the plea that has been made, as some important debates lie ahead. Although I am happy to stay here all night to listen to debates and participate in them, it is impossible at this time in the morning to do proper justice and give the right consideration to the important matters that lie before us.
We have discussed the right to strike, interception of mail, and telephone tapping, and now we have reached the more important decisions about the future of the telecommunications industry which we spent many hours debating in Committee. It would be a tragedy if that were now to develop into a late night session with undue and unadequate consideration being given to those important matters. If that happens the industry will get the impression that the House has rushed the matter through without adequate consideration.
I hope that the Minister will take into consideration the plea made by the hon. Member for Bethnal Green and Bow.

Mr. Kenneth Baker: I find myself in some agreement with the hon. Member for Bethnal Green and Bow (Mr. Mikardo) in that there has been a series of good debates since we started at 3.30 pm, to some extent because he has taken part. I make no complaint about the nature of the debates. They have been exhaustively thrashed out and they have been interesting. They have gone rather wider than they did in Committee, but I make no complaint about that. That is partly the purpose of Report, because hon. Members who were not the experts on the Bill in Committee now have the opportunity of bringing their new approach.
The length of the proceedings has been extended by the debate on telephone tapping. Although that was an important debate, it was peripheral to the main purpose of the Bill. I do not belittle the importance of that debate, but it stands apart from the main consideration of the Bill. It was exhaustively examined.
The hon. Gentleman said that he was past his best. I am sure that that is not the case. He has plenty of stamina. It would be sensible for the House to try to make further progress on the Bill. Before the debate on telephone tapping, we had a debate and vote on the right to strike. Since then, we have had various measures on which we have been able to make some concessions. We have further measures to announce that I think will please the Opposition. I hope that we shall make further progress this evening.

Mr. Mikardo: I am sorry that the Minister has not been more positive. I am deeply grateful to him for his kind remarks. I hoped that he would agree that we might now adjourn. Nevertheless, I read between the lines of what he said and have the feeling that if we go on a little longer he may be disposed to take a similar motion later, either from me or from someone else. In view of that, I beg to ask leave to withdraw the motion.

Motion, by leave, withdrawn.

Mr. Deputy Speaker (Mr. Bernard Weatherill): We now continue the debate on amendment No. 13, with which we are considering amendment No. 99.

Mr. Butcher: I do not intend further to test the patience or stamina of the House. I listened carefully to the right hon. Member for Salford, West (Mr. Orme). He appeared also to be advocating my amendment No. 99, although the two are not necessarily compatible. The former deletes lines 40 to 46 and the latter simply deletes the last line of subsection (8).
I take issue slightly with the right hon. Gentleman. If we consult the ACARD report on public sector research and development, we realise that there are strategic


reasons for ensuring that research is motivated by a need, for example, to develop products suitable for export and not only for the domestic market. That is welcomed by both sides of the industry, I see no reason why the enlightened and benign attention of my hon. Friend the Minister for Industry and Information Technology should not assist British Telecom in that endeavour.
My amendment seeks to remove the last 11 words of clause 6(8). I can see that there are good reasons for the Government being consulted on British Telecom's research and development programme, but it is essential that the programme can be changed with changing circumstances. My amendment makes that clearer than does clause 6(8) as drafted. I hope that my hon. Friend will be able to accept the amendment.

Mr. Golding: I congratulate the hon. Member for Coventry, South-West (Mr. Butcher) on being the only Conservative Back Bencher brave enough to table an amendment. I strongly support his amendment. It is nonsense to include the provision that, once a research programme has been settled, the corporation
shall secure the carrying out of any programme so settled.
Research programmes, by their nature, are varied. A programme cannot proceed regardless of the discoveries that are made, changes in technology, or other outside discovery.
My amendment goes futher. I cannot understand how the Secretary of State has time to give himself yet another power. It is further interference in the day-to-day working of a nationalised industry. In April 1979 the Tories told the country that they would reduce Government interference in the day-to-day business of nationalised industries, yet ever since the right hon. Gentleman became Secretary of State he has been dreaming up additional ways to interfere.
In Committee, the Minister frequently told us that various provisions were contained in Labour legislation, but this is a new power. Goodness knows who dreamt it up and who wanted the Secretary of State involved. He has enough problems on his plate without looking for new ones. It is incredible that he should go out looking for work. Many other people are out looking for work because the Secretary of State has failed so abysmally in his duties. I cannot see why he wants to be consulted. He would not have a clue what the proposals from the corporation meant.
2.30 am
The clause will produce a duplication of officials. It states that
The corporation shall settle from time to time, after consultation with the Secretary of State".
The reality is that officials of the corporation will talk to officials in the Department of Industry. That is nonsense. It would be interesting to know whether the Prime Minister is aware that the Bill creates new statutory duties for officials. It cannot be argued that Martlesham is a lame duck. Ministers recognise, I believe, that Martlesham has been one of the bright stars. Optical fibre, system X and Prestel have been developed within Post Office research facilities. I wonder why the Secretary of State wants to interfere in research activity which has been so successful. He can only make a muck of it. He will make matters worse.
Research is often done in collaboration with, or subcontracted to, private industry, which does not want the Secretary of State involved. Private industry wants to deal

with the research department of British Telecommunications. It does not want to be told that matters will be subject to what the Secretary of State says about the research programme. There is no sense in that approach.
The need is for speed and for decision-making. The Secretary of State is building further delay into the settlement of plans for research and development. Officials, scientists and researchers within the corporation will spend much time preparing detailed plans. They will have to explain those plans and try to get agreement from officials in the Department of Industry who, being human, will justify their existence by putting up objections. That means delay.
I make no bones about the situation. The body that will be blamed for the delay and for the bureaucracy is British Telecommunications. It will not be the Government. Private industry and outside bodies will blame British Telecommunications, but it will not be its fault. The Secretary of State cannot bear to be kept out of anything. He insists upon interfering in every aspect of those parts of the day-to-day management of the nationalised industries on which he can get his hands.
I hope that the Government will accept my amendment, which goes much further than the amendment of the hon. Member for Coventry, South-West.

Mr. Tom McNally: I am very pleased to be called to take part in the debate, not least because the amendment dovetails perfectly with the amendment to which I wished to speak earlier, when I was prevented by an intervention. I am flattered that at so early a stage in my partliamentary career, when the House was asked whether it wanted to hear me it voted so frmly in the affirmative. I trust that it will continue to take a similar view. I shall be brief in order to encourage it to do so.
Unlike my assiduous hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo), I was unable to be here earlier in the debate, because I was in a Select Committee, where we discussed British Steel. We had a distinguished witness before us. I shall not risk straying out of order by stating what his evidence was, but I think I can say that many of the arguments that we have heard today sounded familar—selling off the best, then using that to explain the failure of the worst.
The reason why many people, many of the most highly skilled technical people in our society, lobbied the House yesterday was that they realised that ideology was interfering with technology and a good industry. Their doubts and fears about their industry, about where it is going under the present ideological Government and about which sectors will be hived off are not being answered. Whether they came from Aberdare, Canterbury, Bethnal Green, Bow or South Manchester—one of our high-technology areas, with many members of the Post Office Engineering Union—their fears remain. They are victims of an ideological commitment rather than a commitment to work out the best system for their industry.
One of the most passionate speeches that I heard was that of my very good friend the hon. Member for Westhoughton (Mr. Stott), a worker in telecommunications for a long time. I think that it can fairly be said that no hon. Member has been up telegraph poles more than he has. Possibly only Buzby has been up them more. Ail hon. Members with expertise in the industry are worried


about the Bill. They are worried about the split in their industry. This high-technology industry has uncertainty and doubt fed into it by Government ideology.
Ministers must explain how the clause and their policy will advance research. Neither the workers nor those in industries that work with British Telecom are convinced that it will do so. Therefore, there is a strong suspicion that the Government simply have a blind, ideological commitment and that, as we have seen so often in so many nationalised industries, they are to do something because they promised it, because the Secretary of State committed himself to it, thanks to one of his think-tanks or super-boffins.
As my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) said, the Secretary of State has accrued to himself more powers than any Secretary of State for Industry in peacetime. He has said to every industry with which he has been involved "I am humble. This is not a matter for politicians. Civil servants have no right, but, by the way, we are going to take it into the Department of Industry." There are British Aerospace, the NEB and British Telecom; and so it goes. In the end, it is the Secretary of State's judgment that is involved. Now he is going into the microchip business, a high-technology area, where he will be the man who makes the decision.
I believe that the House has a right to ask the Secretary of State to pause, hold back his ideological juggernaut and consult people in industry who are beginning to doubt his capacity to make these judgments.
I was in Japan just before Christmas. It is a successful country, which keeps people like the Secretary of State for Industry one step away from the powers that he is trying to take in the Bill. Mitel is an example. Decisions there are not taken by giving the Secretary of State for Industry the dictatorial powers proposed in the Bill or by giving him the idelogical open highway that he seeks in almost every aspect of his office.
As my hon. Friend the Member for Bethnal Green and Bow said, it is time to pause and consider whether this high-technology industry should be put into the hands of the Secretary of State for Industry and—more important—whether the capacity, inventiveness and investment in high technology should be subject to his judgment. My belief is that that should not happen, and I hope that the House will agree with me.

Mr. Ian Mikardo: I am sure that the House will be delighted to know that I am about to make my shortest speech of the night—or at least my shortest speech of the night so far.
I want to comment on the two amendments, and I shall take first, amendment No. 99, standing in the name of the hon. Member for Coventry, South-West (Mr. Butcher). The hon. Gentleman is absolutely right, because the words that the amendment seeks to delete could lessen the flexibility of the research programming and activity of the corporation. Theoretically, the words should make no difference. Theoretically, they are meaningless and useless words, which add nothing. I am not sure whether they are a redundancy, a tautology or a pleonasm, but they are certainly superfluous.
It could be argued that the obligation on the corporation to
secure the carrying out of any programme so settled

does not mean that it is compelled to carry on the programme already settled, even though the circumstances and the needs change. According to the first line of the subsection, the corporation could settle the programme every day, or even three times a day after meals.
The hon. Gentleman was right to table the amendment, because what will happen is that programmes will be agreed, a report will be prepared and then something will crop up—a new piece of equipment or some new technology—and someone will produce a report to replace the previous report. The hon. Gentleman intends to avoid that nonsense, and the House should support him.
2.45 am
The title of clause 6 is:
Powers of the Secretary of State over the Corporation".
We have had much argument, to which my hon. Friend the Member for Stockport, South (Mr. McNally) has just contributed, on the question whether the powers taken by the Secretary of State are, as I put it earlier, deeper, wider and more all-pervading than those in any other Bill. Ministers claim that the provisions are copied from previous measures, including some introduced by Labour Governments, but they are not. Clause 6 covers more than two pages and consists of 107 lines and 12 subsections. I do not believe that Ministers can point to another Bill containing such a long clause relating to the powers of a Secretary of State over a corporation.
In addition, I cannot recall a previous case of a technological research programme having to be agreed by a Secretary of State. The clause raises the point that I touched on earlier about the relative expertise of those in BT and those in the Department. My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) rightly pointed out that subsection (8) lays new duties on the officers of the Department. He said that the Prime Minister would object to that because she wanted to reduce the work of the Department. I go further. I believe that the subsection will require the Department to take on additional, highly expensive staff.
I strongly fancy that no one in the Department has sufficient technological knowledge of telecommunications to be able to monitor BT's technological research programme. I doubt whether the Department has anyone who knows as much as the chaps at BT, who are among the best in the world. In order to carry out the obligation in subsection (8), the Department will have to hire somebody who is better than the chaps he will have to monitor. If there is such a fellow knocking about, would it not be more sensible for the Secretary of State to make sure that he works for BT? He would do some good there instead of sitting in the Department of Industry operating the old nanny's dictum of "Find out what Johnny is doing and tell him to stop it." That is what busybody, interfering monitoring means.
What will appointing more personnel do to the PSBR? What will it do to the already sleepless nights of the Chancellor of the Exchequer? Appointing a civil servant to monitor advanced technological research is impractical nonsense of which only an abstruse, airy-fairy, stratospheric theoretician such as the Secretary of State could think. I hope that the House will dispose of this rubbish with the dispatch and contempt that it deserves.

Mr. Michael Marshall: We always enjoy listening to the hon. Member for Bethnal Green and Bow (Mr.


Mikardo). That was his shortest speech and he was in his usual pithy form. I suspect that he will find that his enthusiasm is misplaced.
Both sides of the House are agreed about the excellence of Martlesham. The constituency of the hon. Member for Ipswich (Mr. Weetch) includes Martlesham, and I am sorry that he is not here tonight. On Second Reading, he and I agreed that one of the problems of Martlesham was that not enough had been made of its undoubted technical excellence. If the Department of Industry is to take a sensible view on industrial development, it must understand where centres of excellence in research and development are in both the private and the public sectors and to what extent they can be used for commercial development.
Many claims are made upon us in relation to science and technology and product and process development schemes. It is sensible to try to understand what centres of excellence are about. I have had the opportunity to study such matters on a day-to-day basis, knowing my right hon. Friend's great enthusiasm for the subject. We are willing to stand up and be counted about why we have an interest in such matters.
I am disappointed at some of the remarks by former Ministers in the Labour Government. Hon. Members who had responsibility for the Department in a previous Administration are apt to fold their tents silently in the night. They suggest that the Department should be divorced from such matters. We believe that we should take an interest in them.
The Bill responds to technological change and its ever-increasing pace. It is important to understand the implications of that technological change, for two reasons. The first is that the kind of research and development within British Telecom is of very great importance to the future investment programme because, obviously, the way in which research and development are going will influence the outcome for much of the next generation of telecommunications equipment. Within the terms of the Bill, that can apply in both the public and the private sectors. Therefore, it is important that we should be involved in the process of consultation, and I stress "consultation".
There is no dictatorial power such as the hon. Member for Stockport, South (Mr. McNally) talked about. He is very good on a number of interesting matters. I happen to know that he is an expert on the Holloway monologues, and I salute him for that and for the breadth of his vision. On this matter, however, he went overboard in talking about ideology and dictatorial powers. Consultation rules, O.K. Surely, in current thinking consultation is what we are supposed to be all about.
On the second aspect of what the research and development should mean to the Government of the day, surely they are of great importance in terms of opening up new services and different types of equipment. If we look at the Bill as a whole, we see that number of things that we seek to do would surely lead us to have a reasonable dialogue about the very birth of technoloy within this great industry.
I want to make the point that we are not seeking to approve the programme, and here I address myself to the hon. Member for Bethnal Green and Bow. It is process of consultation. British Telecommunications will retain its commercial freedom exactly as at present, and I believe that that is right. But we think that consultation is

important. The hon. Gentleman suggested that this was some kind of unique affair. I must remind him of the precedents for this. I think that we had this in Standing Committee, but I remind him again. The Transport Act 1968 specifically sought a power of approval. The Conservative Act of 1972 sought consultation. In this matter, the precedents would seem to suggest that we are perhaps rather more relaxed than previous Labour Governments. This is important in its own right, and I urge the hon. Gentleman to think this through perhaps a little further.
Certainly, in terms of the arguments that have been put forward tonight, I want to try to go some way to meet the Opposition, and I particularly want to meet the view of my hon. Friend the Member for Coventry, South-West (Mr. Butcher), because his amendment—I recognise that the right hon. Member for Salford, West (Mr. Orme) supported it in opening—was designed to make sure that we were concerned here with consultation. The emphasis on the follow-through aspect, where I think the hon. Gentleman was on sounder ground in questioning whether the words were necessary, brings us to a situation in which the Government certainly want it to be quite plain that we think consultation is appropriate in this situation.
Therefore, in order to make the matter clearer we are disposed to accept the amendment in the name of my hon. Friend the Member for Coventry, South-West, and we hope that this will go some way to assure Opposition Members that we consider this to be a serious question on which we have sought to find common ground.

Question put, That the amendment be made:

The House divided: Ayes 174, Noes 263.

Division No. 136]
[3.00 am


AYES


Adams, Allen
Dixon, Donald


Allaun, Frank
Dobson, Frank


Anderson, Donald
Dormand, Jack


Archer, Fit Hon Peter
Douglas, Dick


Ashton, Joe
Dubs, Alfred


Atkinson, N. (H' gey,)
Duffy, A. E. P.


Barnett, Guy (Greenwich)
Dunnett, Jack


Benn, Rt Hon A. Wedgwood
Dunwoody, Hon Mrs G.


Bennett, Andrew (St'kp't N)
Eadie, Alex


Booth, Rt Hon Albert
Eastham, Ken


Bray, Dr Jeremy
Ellis, R. (NE D'bysh're)


Brown, Hugh D. (Provan)
English, Michael


Brown, R. C. (N'castle W)
Ennals, Rt Hon David


Brown, Ron (E'burgh, Leith)
Evans, Ioan (Aberdare)


Brown, Ronald W. (H'ckn'y S)
Evans, John (Newton)


Callaghan, Jim (Midd't'n &amp; P)
Flannery, Martin


Campbell, Ian
Fletcher, Ted (Darlington)


Campbell-Savours, Dale
Forrester, John


Cant, R. B.
Foster, Derek


Carmichael, Neil
Foulkes, George


Clark, Dr David (S Shields)
Fraser, J. (Lamb'th, N'w'd)


Cocks, Rt Hon M. (B'stol S)
Freeson, Rt Hon Reginald


Coleman, Donald
Garrett, John (Norwich S)


Cook, Robin F.
George, Bruce


Cowans, Harry
Gilbert, Rt Hon Dr John


Cox, T. (W'dsw'th, Toot'g)
Golding, John


Cryer, Bob
Graham, Ted


Cunliffe, Lawrence
Grant, George (Morpeth)


Cunningham, Q. (Islington S)
Grant, John (Islington C)


Dalyell, Tam
Hamilton, James (Bothwell)


Davidson, Arthur
Hamilton, W. W. (C'tral Fife)


Davies, Rt Hon Denzil (L'lli)
Hardy, Peter


Davies, Ifor (Gower)
Harrison, Rt Hon Walter


Davis, T. (B'ham, Stechf'd)
Hart, Rt Hon Dame Judith


Deakins, Eric
Hattersley, Rt Hon Roy


Dean, Joseph (Leeds West)
Haynes, Frank


Dempsey, James
Hogg, N. (E Dunb't'nshire)


Dewar, Donald
Holland, S. (L'b'th, Vauxh'll)






Home Robertson, John
Roberts, Allan (Bootle)


Hooley, Frank
Roberts, Ernest (Hackney N)


Huckfield, Les
Roberts, Gwilym (Cannock)


Hudson Davies, Gwilym E.
Robertson, George


Hughes, Robert (Aberdeen N)
Robinson, G. (Coventry NW)


Hughes, Roy (Newport)
Rooker, J. W.


Janner, Hon Greville
Ross, Ernest (Dundee West)


John, Brynmor
Rowlands, Ted


Johnson, James (Hull West)
Sheerman, Barry


Jones, Dan (Burnley)
Shore, Rt Hon Peter


Kaufman, Rt Hon Gerald
Short, Mrs Renée


Kilroy-Silk, Robert
Silkin, Rt Hon J. (Deptford)


Lamond, James
Silverman, Julius


Leadbitter, Ted
Skinner, Dennis


Leighton, Ronald
Snape, Peter


Lewis, Ron (Carlisle)
Soley, Clive


Litherland, Robert
Spearing, Nigel


Lofthouse, Geoffrey
Spriggs, Leslie


Lyons, Edward (Bradf'd W)
Stewart, Rt Hon D. (W Isles)


McCartney, Hugh
Stoddart, David


Mc Donald, Dr Oonagh
Stott, Roger


Mc Elhone, Frank
Strang, Gavin


Mc Guire, Michael (Ince)
Straw, Jack


Mc Kelvey, William
Summerskill, Hon Dr Shirley


Mac Kenzie, Rt Hon Gregor
Taylor, Mrs Ann (Bolton W)


Mc Nally, Thomas
Thomas, Dafydd (Merioneth)


McNamara, Kevin
Thomas, Dr R. (Carmarthen)


Mc Taggart, Robert
Thorne, Stan (Preston South)


Mc William, John
Tinn, James


Magee, Bryan
Urwin, Rt Hon Tom


Marshall, Dr Edmund (Goole)
Varley, Rt Hon Eric G.


Marshall, Jim (Leicester S)
Wainwright, E. (Dearne V)


Martin, M (G'gow S'burn)
Walker, Rt Hon H. (D'caster)


Maxton, John
Watkins, David


Mikardo, Ian
Welsh, Michael


Millan, Rt Hon Bruce
White, Frank R.


Mitchell, Austin (Grimsby)
White, J. (G'gow Pollok)


Morris, Rt Hon C. (O'shaw)
Whitehead, Phillip


Morris, Rt Hon J. (Aberavon)
Williams, Rt Hon A. (S'sea W)


Moyle, Rt Hon Roland
Wilson, Gordon (Dundee E)


Oakes, Rt Hon Gordon
Wilson, William (C'try SE)


O'Halloran, Michael
Winnick, David


O'Neill, Martin
Woodall, Alec


Orme, Rt Hon Stanley
Woolmer, Kenneth


Pavitt, Laurie
Wrigglesworth, Ian


Pendry, Tom
Wright, Sheila


Powell, Raymond (Ogmore)
Young, David (Bolton E)


Price, C. (Lewisham W)



Race, Reg
Tellers for the Ayes:


Rees, Rt Hon M (Leeds S)
Mr. George Morton and Mr. Allen McKay 


Richardson, Jo





NOES


Alexander, Richard
Braine, Sir Bernard


Alison, Michael
Bright, Graham


Alton, David
Brinton, Tim


Ancram, Michael
Brittan, Leon


Arnold, Tom
Brooke, Hon Peter


Aspinwall, Jack
Brotherton, Michael


Atkins, Robert (Preston N)
Brown, Michael (Brigg &amp; Sc'n)


Atkinson, David (B'm'th, E)
Browne, John (Winchester)


Baker, Kenneth (St. M'bone)
Bruce-Gardyne, John


Baker, Nicholas (N Dorset)
Bryan, Sir Paul


Banks, Robert
Buck, Antony


Beaumont-Dark, Anthony
Budgen, Nick


Beith, A. J.
Bulmer, Esmond


Bendall, Vivian
Butcher, John


Bennett, Sir Frederic (T'bay)
Carlisle, John (Luton West)


Benyon, Thomas (A'don)
Carlisle, Kenneth (Lincoln)


Benyon, W. (Buckingham)
Chalker, Mrs. Lynda


Best, Keith
Channon, Rt. Hon. Paul


Bevan, David Gilroy
Chapman, Sydney


Biffen, Rt Hon John
Churchill, W. S.


Biggs-Davison, John
Clark, Hon A. (Plym'th, S'n)


Blackburn, John
Clark, Sir W. (Croydon S)


Bonsor, Sir Nicholas
Clarke, Kenneth (Rushcliffe)


Boscawen, Hon Robert
Clegg, Sir Walter


Bottomley, Peter (W'wich W)
Cockeram, Eric


Bowden, Andrew
Cope, John


Boyson, Dr Rhodes
Corrie, John





Cranborne, Viscount
Lewis, Kenneth (Rutland)


Critchley, Julian
Lloyd, Peter (Fareham)


Crouch, David
Loveridge, John


Dean, Paul (North Somerset)
Luce, Richard


Dorrell, Stephen
Lyell, Nicholas


Douglas-Hamilton, Lord J.
Mc Crindle, Robert


Dover, Denshore
Mac Gregor, John


du Cann, Rt Hon Edward
Mac Kay, John (Argyll)


Dunn, Robert (Dartford)
Macmillan, Rt Hon M.


Durant, Tony
Mc Nair-Wilson, M. (N'bury)


Dykes, Hugh
Mc Nair-Wilson, P. (New F'st)


Eden, Rt Hon Sir John
Mc Quarrie, Albert


Eggar, Tim
Madel, David


Fairbairn, Nicholas
Major, John


Faith, Mrs Sheila
Marland, Paul


Farr, John
Marlow, Tony


Fenner, Mrs Peggy
Marshall, Michael (Arundel)


Finsberg, Geoffrey
Mates, Michael


Fisher, Sir Nigel
Maude, Rt Hon Sir Angus


Fletcher, A. (Ed'nb'gh N)
Mawby, Ray


Fletcher-Cooke, Sir Charles
Mawhinney, Dr Brian


Forman, Nigel
Maxwell-Hyslop, Robin


Fowler, Rt Hon Norman
Mayhew, Patrick


Fox, Marcus
Mellor, David


Fraser, Peter (South Angus)
Meyer, Sir Anthony


Fry, Peter
Miller, Hal (B'grove)


Gardiner, George (Reigate)
Mills, Iain (Meriden)


Gardner, Edward (S Fylde)
Mills, Peter (West Devon)


Garel-Jones, Tristan
Miscampbell, Norman


Gilmour, Rt Hon Sir Ian
Moate, Roger


Glyn, Dr Alan
Monro, Hector


Goodlad, Alastair
Montgomery, Fergus


Gorst, John
Moore, John


Gow, Ian
Morgan, Geraint


Gower, Sir Raymond
Morris, M. (N'hampton S)


Grant, Anthony (Harrow C)
Morrison, Hon C. (Devizes)


Gray, Hamish
Mudd, David


Greenway, Harry
Murphy, Christopher


Griffiths, E.Ce'ySt. Edm'ds)
Neale, Gerrard


Griffiths, Peter Portsm'th N)
Needham, Richard


Grist, Ian
Nelson, Anthony


Grylls, Michael
Neubert, Michael


Gummer, John Selwyn
Newton, Tony


Hamilton, Hon A.
Onslow, Cranley


Hamilton, Michael (Salisbury)
Oppenheim, Rt Hon Mrs S.


Hampson, Dr Keith
Osborn, John


Hannam, John
Page, Rt Hon Sir G. (Crosby)


Haselhurst, Alan
Page, Richard (SW Herts)


Hastings, Stephen
Parris, Matthew


Havers, Rt Hon Sir Michael
Patten, Christopher (Bath)


Hawkins, Paul
Pawsey, James


Hawksley, Warren
Penhaligon, David


Heddle, John
Percival, Sir Ian


Henderson, Barry
Pink, R. Bonner


Heseltine, Rt Hon Michael
Pollock, Alexander


Hill, James
Porter, Barry


Hogg, Hon Douglas (Gr'th'm)
Price, Sir David (Eastleigh)


Hooson, Tom
Proctor, K. Harvey


Hordern, Peter
Pym, Rt Hon Francis


Howe, Rt Hon Sir Geoffrey
Raison, Timothy


Howell, Ralph (N Norfolk)
Rathbone, Tim


Hunt, David (Wirral)
Rees-Davies, W. R.


Jenkin, Rt Hon Patrick
Renton, Tim


Jessel, Toby
Rhodes James, Robert


Johnston, Russell (Inverness)
Rhys Williams, Sir Brandon


Jopling, Rt Hon Michael
Ridley, Hon Nicholas


Joseph, Rt Hon Sir Keith
Rifkind, Malcolm


Kellett-Bowman, Mrs Elaine
Roberts, Wyn (Conway)


Kershaw, Anthony
Rost, Peter


King, Rt Hon Tom
Sainsbury, Hon Timothy


Knight, Mrs Jill
Scott, Nicholas


Knox, David
Shaw, Giles (Pudsey)


Lamont, Norman
Shelton, William (Streatham)


Lang, Ian
Shepherd, Colin (Hereford)


Latham, Michael
Shepherd, Richard


Lawrence, Ivan
Shersby, Michael


Lawson, Rt Hon Nigel
Silvester, Fred


Lee, John
Sims, Roger


Lennox-Boyd, Hon Mark
Skeet, T. H. H.


Lester, Jim (Beeston)
Smith, Dudley






Speed, Keith
Viggers, Peter


Speller, Tony
Waddington, David


Spicer, Jim (West Dorset)
Wakeham, John


Spicer, Michael (S Worcs)
Waldegrave, Hon William


Sproat, Iain
Walker, B. (Perth)


Squire, Robin
Waller, Gary


Stanbrook, Ivor
Ward, John


Stanley, John
Warren, Kenneth


Steen, Anthony
Watson, John


Stevens, Martin
Wells, John (Maidstone)


Stewart, Ian (Hitchin)
Wells, Bowen


Stewart, A.(E Renfrewshire)
Wheeler, John


Stokes, John
Whitelaw, Rt Hon William


Stradling Thomas, J.
Whitney, Raymond


Taylor, Teddy (S'end E)
Wickenden, Keith


Temple-Morris, Peter
Wiggin, Jerry


Thatcher, Rt Hon Mrs M.
Wilkinson, John


Thomas, Rt Hon Peter
Williams, D.(Montgomery)


Thompson, Donald
Winterton, Nicholas


Thorne, Neil (Ilford South)
Wolfson, Mark


Thornton, Malcolm
Young, Sir George (Acton)


Townend, John (Bridlington)
Younger, Rt Hon George


Townsend, Cyril D, (B'heath)



Trippier, David
Tellers for the Noes:


Trotter, Neville
Mr. Spencer Le Marchant and Mr. Carol Mather.


van Straubenzee, W. R.



Vaughan, Dr Gerard

Question accordingly negatived.

Amendments made: No. 99, in page 9, line 45, leave out from 'matters' to end of line 46.—[Mr. Butcher.]

No. 106, in page 10, line 29, leave out 'section' and insert 'Part'.

No. 107, in page 10, line 31, at end insert '(a)'.—[Mr. Kenneth Baker.]

Clause 10

TRANSFER TO THE CORPORATION OF CERTAIN PROPERTY, RIGHTS AND LIABILITIES OF THE POST OFFICE.

Mr. Kenneth Baker: I beg to move amendment No. 14, in page 13, line 13, leave out
'by virtue of this Act'.

Mr. Deputy Speaker: With this we may take Government amendments Nos. 15 to 21, 79, 80, and 90.

Mr. Baker: The House will be glad to know that this long list of rather complicated amendments is entirely technical and clarificatory to the vesting provisions stemming from the distinction between the transfer of property, rights and liabilities, which is a single process done by the Act, and the vesting of that property in BT which is consequential upon the transfer and takes place by virtue of the Act. After the transfer the property is, and continues to be, vested in its new owner.

Amendment agreed to.

Amendments made: No. 15, in page 13, line 14, after 'and', insert
'by virtue of this Act'.

No. 16, in page 13, line 25, leave out 'the agreement' and insert
'or determined by or under the agreement and in such circumstances (if any) as may be so specified'.

No. 17, in page 13, line 26, leave out
'by virtue of this Act'.

No. 18, in page 13, line 30, leave out
'by virtue of this Act'.

Line 19, in page 13, line 35, at end insert—
'(5A) Subject to subsection (6), in the case of any agreement under subsection (4) the property, rights and liabilities in

question shall on the date of the coming into force of the agreement be transferred, and by virtue of the agreement vest, in accordance with the agreement. '.

No. 20, in page 13, line 37, leave out '(4)' and insert
'(5A) subject, in the case of a transfer under subsection (5A), to any reference in that Schedule to a vesting by virtue of this Act being construed as a reference to a vesting by virtue of the agreement in question'.

No. 21, in page 13, line 38, at end insert—
'(7) Any reference in this Act to a transfer by this Act is a reference to a transfer under subsection (2) or (5A).'.—[Mr. Kenneth Baker.]

Clause 11

TRANSFER TO THE CORPORATION OF STATUTORY RIGHTS AND LIABILITIES AS TO TELEGRAPHS

Mr. Michael Marshall: I beg to move amendment No. 22, in page 14, line 1, leave out 'On the appointed day' and insert
'Without prejudice to the generality of subsection (2) of section 10, the rights and liabilities transferred from the Post Office to the Corporation under that subsection shall include'.

Mr. Deputy Speaker: With this we may take Government amendment No. 23.

Mr. Marshall: These amendments put beyond doubt the fact that clause 10(2) transfers statutory rights and liabilities, as well as non-statutory ones, from the Post Office to BT.

Amendment agreed to.

Amendment made: No. 23, in page 14, line 4, leave out `that day shall become those of the Corporation, and it' and insert
'the appointed day, and the Corporation'.—[Mr. Michael Marshall]

Clause 12

EXCLUSIVE PRIVILEGE OF THE CORPORATION WITH RESPECT TO TELECOMMUNICATION

Mr. Michael Marshall: I beg to move amendment No. 25, in page 14, line 29 after 'running', insert
'telecommunication systems, that is to say'.

Mr. Deputy Speaker: With this we may take Government amendments Nos. 29, 57 and 58.

Mr. Marshall: The term "telecommunication system" appears in various places in the Bill, but the expression is not defined. These amendments provide for a definition in terms of those systems covered by the exclusive privilege in clause 12(1). I think that this will make the Bill clearer, and I commend the amendments to the House.

Mr. Charles R. Morris: Government amendment No. 57 relates to clause 55. In Committee the Under-Secretary gave an undertaking to consider the services provided over post office counters and table a reasoned amendment on Report. There is no reasoned amendment. Will the Minister look as this again?

Mr. Marshall: I shall look into that matter further.

Amendment agreed to.

Amendment made: No. 27 in page 15, leave out lines 11 to 22.—[Mr. Michael Marshall.]

Clause 15

SAVING FOR THINGS DONE UNDER A LICENCE

Mr. Golding: I beg to move amendment No. 28, in page 17, leave out from beginning of line 36 to second 'by' in line 39.

Mr. Deputy Speaker: With this we may take the following amendments: No. 30, in page 17, line 47, at end insert—
'(1A) The Secretary of State shall license the Corporation to provide telephone services and for that purpose to provide a system falling within subsection (1) of section 12 which shall not extend beyond the first point available for connection of apparatus within each set of premises occupied by a single household or business.'.

No. 31, in page 18, leave out lines 1 to 4.

No. 32, in page 18, leave out lines 16 to 20.

No. 33, in page 18, leave out lines 30 to 37.

No. 34, in page 18, leave out lines 41 and 42.

No. 35, in page 18, line 42, at end insert—
'(10) An application for a licence under subsection (1) shall not be refused unless it appears to the grantor that one or more of the following circumstances applies:—

(a) the system which is the subject of the licence does not conform to the relevant standards defined under section 16;

Mr. Golding: At this late hour we reach the nub of the Bill. Clause 15 provides for the breaking of the monopoly of BT. It has bitterly upset many of the staff employed by BT.
The hon. Member for Canterbury (Mr. Crouch) talked earlier of the insecurity expressed by the 15 Post Office members who lobbied him today. Most of that insecurity stems from their understanding, which I believe to be correct, of this clause. The object of the amendment is to remove from the Secretary of State the right to issue licences.
I am totally opposed, as will be all the unions in the Post Office and British Telecom, to the amendments put down by the Liberal Party. The Liberals seek to go even further than the Government in breaking the monopoly. If they had their way, they would bring about even greater insecurity among Post Office and British Telecom staff than even the Secretary of State has managed. There will be a great deal of surprise among members of the Union of Communication Workers and Post Office Engineering Union when they see the policies advocated by the Liberal Party for British Telecom and the Post Office.

Mr. Alton: The hon. Gentleman will recall that in Committee I moved a reasoned amendment on the need for an independent authority to act as the licensing authority. That authority would owe allegiance neither to the Secretary of State nor to the industry, but would act in the same way as, say, the Civil Aviation Authority. Regrettably, that amendment cannot be moved again in those terms. While I shall certainly be putting points on behalf of the Liberal Party when we come to discuss our amendment, to say that it in any way undermines the rights of those working in the telecommunications or postal industries is absolute nonsense. I hope that the hon. Gentleman will accept that.

Mr. Golding: If the Liberal amendments were accepted—and I hope that they will not be—they would go even further than the Government in breaking the

monopoly. That in itself would create insecurity and would almost certainly create redundancies in BT which would not otherwise occur. It is the attack on the monopoly by the Liberal Party's amendments Nos. 30 and 35 that I so strongly condemn and wish to bring to the attention of people in the Post Office.
I return to the Government's proposals. On Second Reading I expressed the legitimate fear of Post Office engineers about the loss of job security as a result of breaking the exclusive privilege of BT to provide service. Conservative Members have argued that there is a possibility of additional work as a result of the proposals, but there is utter scepticism in BT about that proposition. Indeed, the majority of its members strongly believe that breaking the monopoly will lead not only to less work in BT and among existing Post Office staff but to a substantial loss of work in the British manufacturing industries. For Post Office engineers, job security is important, particularly at present, when there are high levels of unemployment. Job security has always been important for these people.
In 1919 the Post Office engineers decided to opt for civil servant status. They decided to go for a career and job structure in return for other benefits which would not otherwise have been available. They made a conscious decision that job security was of great importance to them. Many things have flowed from that job security. As a result, this threat to jobs is very serious. This is because the members of my union are gravely threatened by job losses as a result of technological change.
I have long been an advocate of technological change. I supported TXE4, system X and optical fibres. Each technological development has this in common with the one before—it destroys jobs. Despite that, for many years I and my fellow officers in the Post Office Engineering Union have campaigned vigorously for the acceptance of technological change and of certain working practices.
In our union a few years ago we had the irony of the union putting pressure on Post Office management to accept productivity bargaining. Why have we always been able to argue in terms of the acceptance of technological change and productivity bargaining? We have been able to do so because there has been underlying job security. We were not persuading men to accept changes which would put them out of work. That has made a great difference to the atmosphere in which we work. Whenever I have been challenged about the policies we have pursued I have been able to say "Telecommunications is an expanding business. If you lose work in one area there is other work to be picked up and further work will emerge."
Under the Bill the Government are saying that we can keep the network, which is basically an area of diminishing employment, but that the work which we are likely to lose will be in the expanding area of employment, fitting the peripheral equipment to the network. What the Government are saying to us, as union officials, is "Go to your members and try to persuade them still to accept technological change but to accept, in addition, that any work which might formerly have been available for them is not to be theirs." That is the situation and it is serious.
I oppose this proposal because it threatens the job security of Post Office engineers. I know that it will be argued that it will not diminish the number of British jobs in telecommunications. That is not a satisfactory answer for those who have been Post Office engineers throughout their lives. There is a tradition in the Post Office, among


manual workers as well as technicians, whereby they have come to look upon their jobs as careers. They look upon their jobs in the same way as do clerical workers or managers in other industries. They have come to expect that they will be employed by the same employer. That has big benefits for the employer. The rank and file staff in the Post Office owe much more allegiance and are often more dedicated to the success of the industry, and more closely tied to the Post Office, than is top management, which comes in and out like a buck rabbit. It is the staff who have the dedication to the firm. They will not take kindly to anyone who says "If you lose your job with British Telecommunications or the Post Office, you can go and work for IBM or Plessey." That is not on. The staff will say "We have devoted 20 or 30 years of our life to helping to build British Telecommunications, and that is where we want to stay. We do not want our work taken away from us." I make no bones about the fact that my starting point is that of job security for Post Office engineers.

Mr. Cryer: When he mentions the devotion of the British Telecommunications engineers, will my hon. Friend also point out that that devotion and loyal service have never been questioned by any member of the Government? They accept that the staff have given loyal service but seem to be rewarding them with a particularly shabby piece of legislation.

Mr. Golding: It is common for people to be brought in from outside to top management, and always, when they leave, they pay their respects to the staff who have served under them. It is seriously meant. They are surprised at the loyalty of the staff. They are not used, in our class-ridden society, to an organisation in which, because there is no private ownership, no clear division, there is an atmosphere which can described as a family atmosphere. Certainly, there is identification among those who work in the industry with the job that has to be done and with the business generally.
This objection to our union members losing their jobs is not the only objection to be made to this proposal. For a long time, one of the things that I have clearly recognised has been that, along with pay and conditions of service, pride in the job is essential for work people. Again, one of the characteristics—it has been tarnished from time to time—of the members whom I represent is that they want to take a pride in their jobs. They want to take a pride in British Telecommunications.
I shall not repeat the hour-and-a-half long speech that I made in Committee. I say simply that it has been the union which has campaigned since 1960 for greater investment in telecommunications. It has been the union which has campaigned for modernisation, expansion and better marketing. Why has the union done this? It has done it because it realised that the morale of our members has depended upon there being adequate investment, competent management and a good telecommunications system. The morale of our members is all-important. It is imperative that people in such an organisation take a pride in their jobs.
They fear that private industry will be able to come in on terms that are unfair to British Telecommunications. It will be able to cream off the profits.
3.30 am
As my hon. Friend the Member for Westhoughton (Mr. Stott) said, British Telecommunications will be left with

the unprofitable parts of its network. British Telecommunications will maintain the network, but areas of potential, such as those involving peripheral equipment, will be opened up to competition. Work will be lost and profits will be lost. That will have a bad effect. Private industry will not want to serve customers living in remote areas or I small provincial towns, and those customers will suffer. If the profits go to private industry, there will be no money available for investment. It will be difficult to keep prices down; indeed, they will increase. That is the inevitable effect of creaming off the profitable parts of British Telecommunications.
The same effect has been felt in the United States of America. In Committee I asked whether Ministers had comsulted the American consumers' association. It is admitted that although there may have been some advantage to business in the big towns as a result of the liberalisation that followed the Cartaphone telephone decision, residential subscribers suffered badly and will continue to do so.
The breaking of the monopoly will result in higher prices for the consumer. The Government are starving British Telecommunications of the funds that it needs and are not permitting it to borrow. As a result, the system is suffering from under-investment. Investment could be paid for through internally generated funds. However, the more that is creamed off the less will there be available for investment. That is demoralising to many.
Another issue is exercising the minds of many Post Office engineers, namely, the stupidity of duplicating maintenance. If one piece of equipment is attached to another and there is a fault, there will be an argument about the origin of the fault and where responsibility lies. Many of our members are apprehensive about the division of maintenance between private enterprise and the Post Office. The customers of British Telecommunications are entitled to have their equipment maintained.

Mr. David Stoddart: Is it not a fact that much of the equipment will be imported and may not be up to the standard required by the Post Office? Instead of new jobs being provided in private industry, jobs in private industry may be lost as the result of an influx of cheap imports that are not suited to the excellent system that the Post Office has built up over the years with great public investment.

Mr. Golding: My hon. Friend is correct. I shall give examples of that shortly. We have now to consider the situation that has arisen because BT has been starved of capital. The union members whom I represent do not believe that competition will be fair, because—the Financial Secretary to the Treasury may laugh, but it is his responsibility and I put the blame straight on the Treasury—at that time the Minister was doing his best to get rid of the daft system of cash limits and dispense with the Treasury mumbo-jumbo of the public sector borrowing requirement. I am embarrassing the Minister by telling the House how embarrassed he looked when he moved an amendment which would have permitted BT to borrow and avoid its problems, but he had to read a Treasury brief which said "We are sticking to cash limits." I felt sorry for the Minister. His heart was filled with common sense, but his brief came from the Treasury.
The problem that we have is of explaining to our members that the Government say that subsidies must be


created and that the corporation must compete with private firms from outside. I am interested in how it can compete. First, we must spend most of our investment moneys on the network, because it needs modernisation. To prepare for information technology we must invest heavily. Under the present regime, however, the money will not be available to put into the subsidiaries. Thus, the firms will not be able to compete.
Added to that, the Minister said that there should be no cross-subsidisation. The Government are telling Post Office subsidiaries that they must compete against firms coming from outside which might be cross-subsidised. Thus, the competition will be unfair.
However, that is the point of view of the members of the Post Office Engineering Union, and I shall consider it more widely. When I was at the Department of Employment I saw the telecommunication equipment manufacturing industry shrink with a loss of 40,000 jobs; I may have the figure wrong. In Liverpool, Nottingham and the North-East, with GEC and Plessey, jobs were disappearing fast because the export market was being lost. We had not modernised quickly enough to compete against the Crossbar and SPC systems from abroad. The manufacturing industry was in a great deal of trouble. My hon. Friend the Member for Swindon (Mr. Stoddart) is correct in drawing attention to the possibility of the loss of business by those companies to foreign companies.
One of the surprising things is the way in which the trade press has switched from being supporters of liberalisation to expressing all the doubts and anxieties of British manufacturers. An article in the Electronics Times of January 1981 states:
One man pours scorn over PORS. Liberalisation of British Telecom is a subject which affects every telecoms manufacturer. Eric Wignall talks to Jeoff Samson of STC….
One of STC's big concerns is that with liberalisation may come a lowering of the standards, not to the extent of affecting the performance of the network, but enough to allow imported telephones to meet the requisite criteria.
Where the big risk occurs, said Samson, is in this interim period between the Minister's announcement last July and when the law becomes clear, following the passing of the Act.
Standards may be lowered, and the foreign firms that produce only to the lower standard will push in equipment, which leaves British STC and other manufacturers high and dry.
The "Telecommunications Supplement to Electronics Times" states that the equipment that has come in
generally has been imported from Japan, United States, Taiwan and Italy. Some of it was much more sophisticated than anything then available from Telecom.
However, much of it was not just cheap, but shoddily made, and even incompatible with the United Kingdom telecommunications system. Telecom is particularly worried about such equipment as it can cause faults by capturing lines".
Foreign firms establish component assembly plants here, in the same way as warehouses are established, on industrial estates.
The article continues:
Vako Electronics were eager … to tell Electronics Times of its plans to set up a telephone assembly facility in the United Kingdom. Parts for the telephone would be imported from Taiwan, while the electronics would be developed and manufactured by Vako.
The company is now just importing the ready assembled equipment from Taiwan. It is then being sold through an agent in the United Kingdom, and Vako has no further interest in the business.

Many United States manufacturers are looking to the bonanza of the British telecommunications market. Company after company is being established here. Other countries are laying down specifications for equipment that no one else can precisely meet. It is ironic that while other countries are tightening up their markets we are opening ours. It is absurd. At a time when the Department of Industry cannot cope with the industrial redundancy and destruction that it is creating, it is destroying yet another industry. I cannot understand why, insted of assisting companies such as Plessey and GEC by making certain that British Telecom's equipment is manufactured in Britain, the Government are doing their damnedest to make things difficult.

Mr. Gerry Neale: I listened to the excellent contributions that the hon. Gentleman made in Committee. Will he comment on the fact that while the Bill provides for liberalisation it also provides for a change to new standards that still has to take place and that, in the meantime, British Telecom is buying foreign equipment, namely, Mitel Analogue PABXs, of a lower standard than it is insisting upon from British manufacturers? How does the hon. Gentleman justify that?

Mr. Golding: I am not justifying it. It is the sort of question to which the answer is "We will look at it." I shall not use cash limits as a defence, although I understand the argument. I have defended in the House the purchase of Ericsson equipment at a time when Plessey was unable to cope with an international exchange. I would not do so today. Unemployment has reached such a level that it would be indefensible for a publicly owned corporation not to give almost total preference to British goods.
In debates over the past three months I have been disturbed at the extent of the influence of IBM. Some years ago, when in Opposition, I visited Plessey, GEC, AEI and Standard. They talked about liberalisation. I understood the reason. I could see why hon. Members representing Liverpool, Newcastle and Nottingham were attracted by the argument. In the arguments over the last three or four months, IBM has been the biggest single lobbyist.
I was told at the United States embassy that a chap like me should not have had to buy a dinner for three months in view of the money IBM was spending in lobbying on the Bill.
I was disgusted yesterday to see the press notice on the Minister's reply to the hon. Member for Cornwall, North (Mr. Neale) on PABX maintenance. It was not only disgusting in principle; it was tailor-made for IBM. It was a handout to IBM. That American company seems to have gained more influence in the House in the last four months than Weinstock, who is always quoted but who has had no influence compared with IBM. Plessey has had no influence compared with IBM.
The Government have sold out completely to IBM. The statement
Mr. Baker announces private maintenance of certain PABXs
might as well have been "IBM bonanza". I receive letters from British telecommunication companies saying that the Government are right in principle but that the action is wrongly timed. This means the loss not only of profit for those companies in the years to come, but of jobs. I do not attack profit—it is needed for investment, and so on—but I strongly attack the Government's introducing measures


such as this when 3 million or more of our people will be unemployed and there is a background of demoralisation not only of work people but of managers and foremen.
The cynicism displayed by certain Conservatives, Members adds to the problems. When I argue in private with them that the Bill means loss of jobs and that that is to be deplored, when I argue that it means giving the work to IBM, the answer is "IBM is better, and British companies must suffer." When I was a child, members of the Conservative Party claimed to be patriots, and they displayed the Union Jack. They claimed to speak for the British people. They cannot say that now. If they believe that the interests of multinational companies come before the interests of working people, it is time they left office.

Mr. Skinner: My hon. Friend has made an extremely good case about technology and the resultant loss of jobs. The unions did not oppose the introduction of new technology, because they realised that it was necessary. The Bill will make the position worse, as will the cuts in public expenditure. My hon. Friend may be able to explain how the cuts in spending in the rest of the public sector have led to loss of jobs in telecommunications. They are bound to have had a spin-off effect, as they have in many manufacturing industries.
To what extent is it necessary to reverse those cuts in order to assist the British companies as opposed to the multinationals? What about the lifting of exchange controls and the amount of money invested overseas? It is not just a question of blindly supporting multinationals; it is a matter of ensuring that there will be a profit for those who invested their money in those multinationals abroad, arising out of the relaxation of exchange controls.

Mr. Deputy Speaker: I hope that I shall agree that what the hon. Member for Newcastle-under-Lyme (Mr. Golding) says about that is in order.

Mr. Golding: My hon. Friend has made my speech for me, and saved me from being ruled out of order.
Those on the Opposition Front Bench must say what they intend to do about the position. The Government are tonight destroying one important area of public ownership. It is incumbent upon those on my Front Bench to tell us that they will reverse the Government's decisions when we take office.

Mr. Alton: I listened, as usual, with great interest and respect to the hon. Member for Newcastle-under-Lyme (Mr. Golding). In the Standing Committee he made a contribution that was second to none, speaking with more knowledge than most hon. Members have, from the trade union point of view.
However, I fundamentally disagree with the hon. Gentleman's views about the monopoly and with what he says about job opportunities. I believe that parts of the Bill will ensure that with liberalisation great new job opportunities will be opened up, particularly in private enterprise. The hon. Gentleman must not be blinkered about this matter. People work in firms such as Plessey just as much as they work in British Telecom. If the Bill is made to work properly, not only will it safeguard existing jobs; it may mean new jobs.
There are reasons—the hon. Gentleman gave some—for ensuring that certain safeguards are enacted. I wrote to the Secretary of State last week concerning my reservations about Plessey, in particular, and I hope that

the Minister will say a word in that connection. Amendment No. 35, standing in my name, relates to some of the safeguards which will help to protect jobs in the manufacturing industries involved in telecommunications.
I carefully noted the amendments tabled in Committee on such matters as the right to strike, telephone tapping, pension funds and the need for an independent authority. I disagreed with the Government, but I agreed with them on the question of the monopoly, the need to split the operations of the postal services and telecommunications, and the need to privatise Cable and Wireless. I reached my conclusions on the merits of the arguments that were presented, but I expressed my reservations about what I considered wrecking amendments such as those on the Amendment Paper tonight. I shall, therefore, recommend my right hon. and hon. Friends to vote against them.
In speaking to amendment No. 30, I shall need to refer to the two amendments to clause 12 standing in my name which were not selected, because amendment No. 30 depends on the Secretary of State being granted exclusive privilege of licensing the running of telecommunications systems. I accept that those amendments have not been selected, but if I were to press amendment No. 30—which I do not intend to do—the other two amendments would have to be taken with it. I hope that the Minister will bear that fact in mind if the matter is pursued in another place.
Such exclusive privilege as there is in telecommunications should be in the hands of the Secretary of State, under the aegis of the Secretary of State vested in the Crown, rather than in a public corporation, which is a business enterprise and thus not subject to the same control or scrutiny of Parliament. In Committee I said that an independent authority was needed, but, regrettably. the amendment was not accepted. While that would be my ideal alternative, I believe that it is proper for telecommunications to be handled by the Secretary of State, though I take a different view about postal services.
The purpose of amendment No. 30 is to define the extent of the BT monopoly. Under the Bill as drafted, BT would have a total monopoly which could be derogated unpredictably by the licences of successive Secretaries of State. If the Secretary of State were statutorily given the exclusive privilege of licensing the running of telecommunications systems, as proposed in the unselected amendments, BT would need licences as well as the third parties. That would put BT on a fairer footing. The amendment seeks to require the Secretary of State by law to license BT to provide basic telephone service and the public network for that. That would make good sense, because BT has a natural monopoly based on reasons of economy and efficiency. I am sure that all hon. Members would agree that competition in this area would not be in the public interest.
I turn to amendment No. 35. I suggest that
an application for a licence under subsection (1) shall not be refused unless it appears to the grantor that one or more of the following circumstances applies:—

(a) the system which is the subject of the licence does not conform to the relevant standards defined under section 16".
That would mean that much of what the Minister said in his memorandum would be enacted in clause 15. Subsection (10) (b) of the amendment suggests that the licence shall not be refused if
the system which is the subject of the licence is not sufficiently distinct from systems already offered by the Corporation or by other licensees".


That would clarify matters and ensure that two sets of similar equipment that offered nothing new to the British market would not be on the market at the same time.
4 am
Paragraph (c) deals with reciprocal arrangements—
in the case of goods or services not originating in the United Kingdom, the Secretary of State is not satisfied that in the country of origin there is adequate opportunity for the supply of equivalent goods and services originating in the United Kingdom".
When overseas goods might flood our market, they would not be allowed in if we were not given reciprocal arrangements. There is a difference between free trade and unfair trade, and I have tried to highlight that.
Paragraph (d) states:
for a limited period specified when this section comes into force, in the case of goods or services not originating in the United Kingdom, the Secretary of State is not satisfied that suppliers in the United Kingdom have the opportunity to compete on fair terms".
The reason for that is that Plessey and many other companies have taken the view that when the Bill becomes law there will need to be a breathing space for them to adapt to the rigours of the market place. To expose British industry without giving it time to adapt would be an act of incredible folly.
Paragraph (e) provides that a licence shall not be refused if
it is not in the common interests of subscribers, of the Corporation and other suppliers and of their employees.".
That builds in safeguards for consumers and employees.
Paragraph (b) safeguards BT's monopoly because it allows for any other application for a similar licence for basic telephone services to be refused. That would solve any possible problems of interconnectivity which could have arisen by virtue of two or more public networks attempting to provide the same service in the way that, say, the railway companies originally tried to provide a national service with different gauges in different parts of the country. But the possibility of licensing alternative transmission services—for example, satellites or microwave—unconnected with the main BT network would be unaffected by the amendment. Activities that fall outside BT's basic telephone services, and are a complete service on their own, should be licensed as separate activities.
The boundary set out in the amendment should be where the telephone wires cross the wall of the building. BT will need a socket or junction box just inside the building. That is all that it will need for connection, testing and ensuring that all calls are metered. In my view, everything else inside a subscriber's building should be open to competitive supply. In practice, most domestic suppliers with one telephone would continue to agree to the present arrangement of BT using that telephone as the test point for connection to its network.
The wording of the amendments makes it clear that in a multi-occupied block of offices or flats each subscriber's office or flat will be treated separately and any wiring or switches needed in the common parts of the building will be part of the BT network. The electricity boards do not insist on a monopoly of supply of any domestic electrical appliances and there is no logical reason why BT should have a monopoly of apparatus in its customers' premises.

Mr. Stott: When the hon. Gentleman turns on a gas fire, switches on an electric fire or turns on a tap, he is taking something out of a system. If he picks up a telephone he is putting something into a system; he is dialling into an electronic exchange. That is different from any other service.

Mr. Alton: I am sure that the hon. Gentleman is trying to be helpful.

Mr. Stott: I have spent my working life in the industry.

Mr. Alton: I am sure that if the hon. Gentleman wants to spend the rest of his life in the industry many of us will not mind. The point that I was making, before receiving that fatherly advice, was that domestic appliances situated at the end of the network—and whether they put in or take out is irrelevant—are not a monopoly of the electricity boards. The same should apply to BT. BT would be protected by the provision for conformance to standards defined in the Bill, just as the electricity boards have the right to inspect householders' wiring to ensure safety.
The aim of amendment No. 35 is to require the Secretary of State or BT to give reasons for the refusal of a licence. The criteria in the amendment are based on the intention, explicit or implicit, in the Secretary of State's memorandum of 21 July 1980 entitled "Summary of the Proposed Regime".
The clause is worded to leave the grantor with a great deal of discretion, but to safeguard against arbitrary decisions. That means that entrepreneurs planning to introduce a new service will have a better idea whether their applications for licences will be successful before investing resources in their innovations. Their uncertainty with the Bill as drafted chiefly concerns value-added services. It also applies to the conditions which can be specified under clause 16 for approving standards for subscribers' apparatus. The latter point is covered by paragraphs (a), (c) and (d) of the amendment, which allow for reciprocity and phasing which are generally agreed to be necessary to protect British manufacturers and to allow them time to prepare for a free market after the restrictions which have been imposed upon them in the past.
I recognise that, subject to the recommendations of the Beesley report, the Government intend to permit most value-added services on the BT network to be under general licence and rarely to refuse any sound application for a licence. However, I commend the amendment in order to constrain future Secretaries of State from acting capriciously or frustrating the intent of the Bill by refusing to exercise licensing powers. Our worry is that, unless we set that out expressly in the Bill, it may be lost for all time. I hope that at this late hour, when most hon. Members have listened long and hard—

Mr. Skinner: I have listened long and carefully to the hon. Gentleman. He has delivered a speech which sounds like his argument about site value rating. Has his view been approved by Roy Jenkins as a principle? We want to know on what the hon. Gentleman will go to the country. It is no use trotting out gibberish to us. Does Roy Jenkins know whether it will fit the pact? Will it be put to the Liberal conference in October? Will there be a Sunday debate on it?

Mr. Alton: I am delighted that the hon. Member for Bolsover (Mr. Skinner) is so enthusiastic about the possibility of a debate on site value rating. I am sure that


the House will wish to be spared that pleasure at seven minutes past 4 in the morning. I understand that if the Social Democrats had been here tonight they would have supported me. My hon. Friends are present and will support me if we decide to press for a Division. I hope that it will not be necessary to do that, because I trust that the Minister will give the assurances for which I have asked.
Plessey is one of the biggest employers in Liverpool. I declare a constituency interest. About 45 per cent. of my constituents are out of work. I want greater job opportunities for them. That is why I hope that the Bill will contain safeguards and that it will do all that its promoters claim it will do. If it can help to strengthen and develop the private market in telecommunications it will build up employment prospects in the private sector.

Mr. Henderson: In the last few minutes the hon. Member for Liverpool, Edge Hill (Mr. Alton) spoke more sense than in the three months during which he took part in the Committee, although that is not to say that his amendment has merit. That was by way of contrast to the hon. Member for Newcastle-under-Lyme (Mr. Golding), who made so many useful contributions in Committee but tonight, I thought, was not up to the standard which we came to expect from him. What he said about jobs for Post Office Engineering Union members was absolute scaremongering. I think that the kind of fears that he expresses are absolutely groundless and that the job prospects for people with the kind of skills that members of the POEU have will be immensely enhanced as a result of the objectives of the Bill and the policies that the Government have announced. There will be something new for them—competition for their labour—which will put their particular and considerable skills at a premium.
What the hon. Member said about creaming off was equally unfounded. Far from taking away from the profitability of British Telecommunications, the Bill will, I believe, give substantial assistance to its profitability by enhancing the use of the network. The benefit to British Telecommunications of the odd little sale of the odd little bit of apparatus pales into insignificance beside the value to British Telecommunications of even a quite modest increase in the use of the total network and the facilities which are available. Not least, in terms of the moneys available to British Telecommunications, perhaps it should think about selling the extremely successful system X, which it is putting into its own telephone exchanges, to people who want to buy it as PABXs.
I hope that my hon. Friend the Minister will be able to confirm that despite the fears which have been expressed by some customers of British Telecommunications, that computer and data communication system connected to PABXs will not be affected by the exclusive maintenance of PABXs by BT.
I welcomed very warmly the reply which the hon. Member gave to a question from my hon. Friend the Member for Cornwall, North (Mr. Neale). If not tonight, will the hon. Member take an early opportunity to expand on his answer and in particular explain a little more why not all stored programme control devices might come within the terms of his answer? Perhaps he could tell us more about who would approve contractors and whether the reference to contractors in his answer means maintenance contractors and not simply suppliers, and that

by definition we are not saying that suppliers must provide the maintenance service. I hope it will be possible for suppliers to sub-contract maintenance.
In that answer there is reference to a country-wide service and to the fact that contractors who are approved should ensure their technical competence and ability to offer a country-wide service. It seems to me that if a supplier is selling apparatus to be used in only a limited area of the country and has no intention of selling it anywhere else, it is unnecessary for the maintenance facilities to be on a country-wide basis.
Secondly, there are maintenance specialists who have a country-wide service but do not supply apparatus. There is a very good parallel with this in the computer field. I hope that this will be another opportunity for the enhancement of business opportunities and for new opportunities for members of the POEU to engage in that kind of new specialist activity.
Finally, will it be possible for the customers of British Telecommunications or manufacturers of devices to do their own maintenance, as they can now?

Mr. Mikardo: I have no qualifications for assessing what will be the effect of the clause on employment prospects for telecommunications engineers, and because I have no authority to assess that I shall not speak dogmatically about it. The hon. Member for Fife, East (Mr. Henderson) shares my ignorance and my lack of authority. He does not know either. He does not know anything about the employment prospects for telephone engineers, but that has not inhibited him from speaking dogmatically about them. Perhaps it is the effect of the second-childhood mild hilarity that comes over hon. Members at this hour of the morning when they have been up a long time.
4.15 am
The 2,000 Post Office workers whom I met yesterday afternoon, as it now is, at the Central Hall know a bit more than the hon. Gentleman and I about the likely effect of the Bill and the clause on their employment prospects. They were in no doubt. They saw the effect of the Bill and the clause as being highly disadvantageous. As I am ignorant of such matters I am prepared to take their word. If the hon. Gentleman had rather less dogmatism and rather more humility he would be prepared to accept their word as well.
I manfully resist the temptation to comment on the amendments to which the hon. Member for Liverpool, Edge Hill (Mr. Alton) spoke. There is much that I could say about them, but I do not think that they form the main issue that is before us. Therefore, I shall not take up the time of the House by discussing them.
The main issue before us is amendment No. 28, which was moved by my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding). I think that I shall carry the House with me when I say that he moved the amendment so comprehensively and forcefully that there is no need to add much to his introduction; nor is there any possibility of doing so. My hon. Friend spoke about the effect of the amendment, first, on employment prospects, on which he is in a position to know a great deal, and, secondly, upon levels of technology. I shall speak on the topic from yet another aspect, to which I return yet again without apology because it runs through the Bill and is an important feature of it—namely, the relations between the Department and the corporation.
We have had arguments all day, all evening and all night about the extent of the powers that will be given to the Secretary of State. The subsection that we are discussing gives the Secretary of State power to say to the chairman and board of the corporation "This piece of your business you will give away. I say so." It is true that there is an obligation to consult the corporation, but the Secretary of State is under no obligation to take a blind bit of notice of anything that it says. The final say-so is entirely in his own hands. With that final say-so he can say to the chairman of the corporation "This bit of your business I direct you to give away."
What sort of autonomy has the board of the Post Office if someone from outside can decide to tell it to get rid of a part of its business on conditions that it has not approved and cannot negotiate? It is not allowed to get the best commercial deal for itself. The Secretary of State can say "I want you to license the XYZ company for that part of your business for a royalty payment of 4p a time." The board must take it.
What sort of people will the Secretary of State find who will be willing to take the job of running an organisation on those terms? Not for a salary 20 times that of the Secretary of State or double that of Mr. Tiny Rowland would I be in the abject position of having to carry the responsibility of running a great industry with someone else being able to tell me to get rid of it not on my terms but on his terms. If, after that, the Minister can say again—as he has said several times incorrectly—that the Bill gives the Minister no more powers than previous Bills, he has a bigger brass neck than I gave him credit for.
This provision is wildly damaging to British Telecommunications. The House should not allow it.

Mr. Richard Page: I shall go in a different direction from that of the hon. Member for Newcastle-under-Lyme (Mr. Golding). I support the licensing provisions of my right hon. Friend the Secretary of State, and in doing so I should point out that I have not been wined and dined or entertained to luxury dinners. I feel most upset. Next time the hon. Member is invited, perhaps he will mention my name as well. I shall be delighted to attend, but it will not make any difference to my decision tonight.

Mr. Golding: I was not wined and dined. I was merely told that I could have been had I so wished.

Mr. Page: Next time I receive an invitation, I shall make sure that the hon. Gentleman is also invited, and we can go together.
I support the licensing provisions. I should also mention a typical example which has just appeared before the House. I support the realistic solution that my right hon. Friend has reached on the thorny question of PABX maintenance. He provided that solution in an answer to my hon. Friend the Member for Cornwall, North (Mr. Neale).
I shall labour that point a little because it is an example of how licensing will work in practice. It will allay some of the fears of British Telecom. I appreciate the difficulties that my right hon. Friend has found in providing an answer which not only provides for full and equal competition but allows for the safeguarding of the network and protects the present employment of employees engaged in PABX maintenance in British Telecom. The difficulties which he

has experienced will be experienced time and again as new technologies and ideas outstrip the rules and regulations of Parliament and the laws which we have put on the statute book.
I have been worried about safeguarding the responsibility of British Telecom to maintain the integrity of the network. The thought of ill-maintained or faulty equipment sending incorrect signals down the line to the local exchange, causing a log jam or electronic chaos, is not to be actively encouraged. However, if that can be overcome—we are given to understand that it can be—by British Telecom's expertise in reviewing the software programme of the digital stored programme of PABX and checking it back from the exchange for its correctness and effectiveness by remote control, that will remove a major obstacle to that form of liberalisation.
It is right that the present maintenance facility of British Telecom should be allowed to continue, with British Telecom having exclusive responsibility for the presently installed and rather traditionally designed PABX systems. That will allow BT to adapt to any change in the market place without feeling that it may have to start its new life with the pressures of redundancy or unemployment looking the present maintenance team in the face if the existing maintenance contracts are whisked away to private contractors.
I believe that the private contractor and BT can start with equal competition for the supply and maintenance of the more modern digital exchanges. I do not go so far as to say that this is a judgment of Solomon by my right hon. Friend, but it provides a fair and equitable solution to a difficult problem. I should like to think that this is a forerunner of the type of licensing decisions which will be made in the future when further liberalisation opportunities present themselves.

Mr. McWilliam: I listened carefully to the hon. Member for Hertfordshire, South-West (Mr. Page) as well as to the hon. Member for Liverpool, Edge Hill (Mr. Alton) and the hon. Member for Fife, East (Mr. Henderson). There is a degree of misunderstanding in the House, not about the nature of the network which exists, but about the nature of the network which will exist shortly.
The hon. Member for Hertfordshire, South-West was fulsome in his praise for the answer which the Minister gave on PABX maintenance, but it was one of the most dangerous answers that I have ever heard in reply to a question relating to the telecommunications network. It was dangerous because it does not mean that BT will automatically check the output from the software programme on SPC-PABXs at all times.
The problem is that when we have an advanced technology SPC-PABX working into an advanced technology local exchange, which in turn works into an advanced technology trunk telephone exchange, each has its own command language. If the software programme is wrong, that will be found out on initial installation. However, if it goes faulty, that will not be found out, and that can knock out the local exchange or even the trunk exchange—not to the detriment of the business customer who has the PABX but to the detriment of all the customers on the local exchange and to all those trying to get through the trunk exchange.
That is a fundamental point, and if the hon. Member for Hertfordshire, South-West does not accept it he ought


to take better technical advice. The only people who know the command language down the line are those who are responsible for maintaining the integrity of the command structure down the line. That does not mean the cowboys who will be looking after those SPC-PABXs on some kind of maintenance contract; it means the people who will maintain the integrity of the network.
The same argument applies to the amendment in the name of the hon. Member for Edge Hill. He dismissed the suggestion of my hon. Friend the Member for Westhoughton (Mr. Stott) that a telephone line is not like an electricity main or gas main. I assure the hon. Gentleman that it is. During my career in the Post Office, I have seen instances where—

Mr. George Foulkes: People have been gassed by telephone.

Mr. McWilliam: People have not been gassed by telephone. However, I have seen instances where faulty connection has caused a large number of trunk circuits to be knocked out, not at the exchange where the fault originated but 200 miles down the link, where the transient happened to coincide with the frequency that was being used. It is almost impossible to trace it back to the specific installation causing the problem.

Mr. Alton: I think that the hon. Gentleman is perhaps misinterpreting the answer that I gave earlier. I was talking not about the similarities between the kind of service offered but about the kind of appliances that would be held at either end of a gas or electricity supply, or, in this case, a telecommunications supply. The point that I was making was quite simple. The electricity or gas company does not have a monopoly on those appliances. Nor do I think that the telecommunications industry should necessarily have such a monopoly. The hon. Gentleman will no doubt correct me if he thinks that I am wrong.

Mr. McWilliam: The hon. Gentleman is perhaps not aware that it is illegal to put something back into the electricity mains or the gas mains. The whole point about the telecommunications network is that one puts something back into it. Otherwise one could not speak to other people; one couldonly hear them. Anyone who cannot accept that fundamental point about the network fails to understand the nature of the network.
The clause as drafted could cause more damage to the development of an integrated network than anything else in the Bill. I recommend to Conservative Members to think about that and not just about problems concerning their own digital links or the maintenance of their own PABX systems for their companies in the City. In considering the clause they should think of the integrity of the network as a whole and vote for our amendment.

Mr. Skinner: I was tempted to make a few comments on the proposal to hive off parts of the industry or to leave it in the hands of the Secretary of State to do as he likes. I was initially prompted by the remarks of my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding), who knows the industry very well. We do not always agree with one another on the various bodies on which we meet from time to time, although there has been a gradual coming together of late, as we are both harnessed and welded together against the Social Democrats, who do not seem to turn up. [HON. MEMBERS: "Where are they?"] The

Social Democrats in the rural areas will suffer very badly from this hiving off. They are in areas which will be affected more than those of most, though not all, Labour Members who represent urban areas. They will certainly get it in the neck there, although no doubt Roy Jenkins will have a pact drawn up with the Liberals to deal with those matters.
I listened with care to the Liberal spokesman. I do not know whether the hon. Member for Liverpool, Edge Hill (Mr. Alton) is actually the Liberal spokesman. If he is, he has certainly risen very rapidly in the Liberal hierarchy.

Mr. Foulkes: He is the only one who can stay awake.

Mr. Skinner: That is a good point. It applies to a number of other people in this place, too. It shows that some hon. Members on the Labour Benches are prepared to take a keen interest in the Bill. It is clear that some of my hon. Friends, having listened to the comments of those in the industry, are likely to make speeches later. The Liberal spokesman was apparently involved in the Committee to some extent. As he has spoken it should be placed on record that, according to my hon. Friends who worked tirelessly in the Committee to oppose the provisions of the Bill, including this clause, the Liberal spokesman was not there half the time.

Mr. Alton: I do not know where the hon. Gentleman gets his facts from. If it is from one of his friends on the national executive committee of the Labour Party, I suspect that the information is probably as spurious and ridiculous as most of the other things said in that body. I can assure him that what he said is certainly not the case, and I hope that he will withdraw that comment immediately.

Mr. Skinner: The hon. Member should tell us the number of Committee sittings there were on the Bill the number of times he attended, and, more important, the number of hours he spent in the Committee. After all, it is possible to turn up for a Committee, spend a couple of minutes there to get one's name on the register and come out again. That is what I mean by "half the time".

Mr. Alton: The hon. Member should check my record. I am surprised that before making these allegations—he seems to have chosen to single me out for some reason—

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. May I encourage the hon. Member for Bolsover (Mr. Skinner) not to proceed along that line, but to deal with the amendment?

Mr. Alton: The hon. Member for Bolsover (Mr. Skinner) has given way to me again. I hope that he will not pursue that point. I hope that he will give way to one of his hon. Friends from—

Mr. Deputy Speaker: Order. If the hon. Member for Bolsover (Mr. Skinner) has given way, the only matter that is relevant is the amendment.

Mr. Skinner: The hon. Member for Edge Hill seems a bit upset about my saying that he was not there half the time. Will he settle for my agreeing that he was there the other half? That is an advance.

Mr. Alton: I hope that, to clarify this matter, one of the hon. Gentleman's hon. Friends will immediately point out that that was not the case. I am sure that they would not want my reputation to be slighted in this way.

Mr. Skinner: I think that the hon. Member—

Mr. Charles R. Morris: I can understand my hon. Friend making the general point which he has made—

Mr. Deputy Speaker: Order. I hope that the right hon. Gentleman's intervention will be on the lines of the amendment.

Mr. Morris: If you will forgive me, Sir, I shall try to address myself to that.

Mr. Deputy Speaker: I am always happy to forgive the right hon. Gentleman as long as he sticks to the amendment.

Mr. Morris: I wish to direct my intervention in support of the amendment. I was taken by the point made by my hon. Friend about the attendance in Committee of the hon. Member for Liverpool, Edge Hill (Mr. Alton). I certainly appreciate—

Mr. Deputy Speaker: Order. That cannot have anything to do with the amendment.

Mr. Skinner: rose—

Mr. Cryer: rose—

Mr. McWilliam: May I say, on the amendments, that I was impressed in Committee by the assiduous attention which the hon. Member for Liverpool, Edge Hill (Mr. Alton) gave to this clause—

Mr. Alton: It is not fair, and it is not true.

Mr. McWilliam: —and his attendance and consistency in arguing this point? Although I do not agree with his point of view, I must repeat that he was assiduous and was consistent in putting that point of view in Committee.

Mr. Alton: I thank the hon. Gentleman.

Mr. Skinner: I was going on to say that I have heard the hon. Member today, and I checked with some of my hon. Friends about the way in which he voted in Committee.

Mr. Jim Marshall: He was never there.

Mr. Alton: Where is the record?

Mr. Skinner: This might be an area that the hon. Gentleman is not very happy about. In this area, not to do with the Committee generally, he will recall that he made the point that he voted—

Mr. Alton: With the Government.

Mr. Skinner: With the Government. Yet on another occasion he voted another way.

Mr. Alton: No.

Mr. Skinner: Let me put it right—he will vote with us tonight.

Mr. Alton: If the hon. Gentleman had listened carefully to my speech earlier on he would have heard me say that I voted with the Government on the question of the monopolies legislation and the break-up between posts and telecommunications, and that I voted with the Opposition on a number of matters, including telephone tapping, on which I shall be voting with them again tonight

if a vote is taken—[AN HON. MEMBER: "We will not have a vote."] That shows how much the hon. Member has been paying attention to the voting proceedings as well—and on the right to strike—

Mr. Deputy Speaker: Order. The only matter that is relevant is amendment No. 28.

Mr. Skinner: On the question of amendment No. 28, I got the impression from the hon. Member for Edge Hill that tonight he was taking a slightly different view of his amendment, which is not in question.

Mr. Cryer: Will my hon. Friend accept that amendment No. 30—

Mr. Jim Marshall: Order.

Mr. Cryer: It is not out of order, because amendment No. 28 is being taken with amendments Nos. 30 to 35.
The hon. Member for Liverpool, Edge Hill (Mr. Alton) was talking glibly about the ability of private enterprise to compete, with the aid of a licensing system granted by the Secretary of State. Yet the hon. Member, who is a fanatical pro-European, like the rest of the Liberals, and like the Social Democrats—

Mr. Garel-Jones: Where are they?

Mr. Cryer: —has thrown into this question the issue of the Treaty of Rome, which would certainly affect his amendment but on which he never elaborated.

Mr. Deputy Speaker: Order. It would at least be a convenience if the hon. Gentleman had the courtesy to address the Chair so that we could hear what was being said.

Mr. Cryer: May I finish what I was saying? It is sometimes difficult to address two hon. Members at opposite ends of the Chamber. I apologise, Sir.
When the hon. Member for Edge Hill spoke to his amendment he referred specifically, on the basis of fair competition, to the Treaty of Rome. He did not elaborate on this, but it would clearly apply and is relevant to the amendments. Would my hon. Friend care to elaborate on that aspect?

Mr. Skinner: I was about to say that because it shifts its ground so often the Liberal Party is sometimes regarded as a rocking horse—all motion and no progress. I think that that applies in this case as it does in many others. Its members back all the horses in the field. They move first that way, then the other, so that they can trot around the country, together with their new-found friends—

Mr. Garel-Jones: Where are they?

Mr. Skinner: —and spread themselves—

Mr. Mikardo: Every time my hon. Friend mentions the Social Democrats, the hon. Member for Watford (Mr. Garel-Jones) shouts "Where are they?" I can tell the hon. Gentleman—they are up Limehouse creek.

Mr. Skinner: Supping claret.

Mr. McWilliam: I hate to disillusion my hon. Friend, but there are two Social Democrats lurking around the building somewhere. What is more, in the last Division they voted against the Liberals, so it seems that Roy's pact does not operate at this time of night.

Mr. Skinner: That is another one. They have made a good start. Half of them are standing in the GLC elections against Liberals. Now we have this development. It will not last long.
I think we should get on to the serious question of amendment No. 28. [HON. MEMBERS: "Hear, hear."] I want to pursue the point raised by my hon. Friend the Member for Newcastle-under-Lyme. He concentrated on the threat to job security and the possible massive loss of jobs.
This amendment must be set against the background of 2·5 million people on the dole.

Mr. Donald Anderson: More than that.

Mr. Skinner: Indeed, the figure is not far short of 3 million if those on short-time working and women who are not on the register are taken into account. According to the Treasury, the Bank of England and 364 economists, unemployment will increase rapidly. The amendment will threaten jobs in an area in which jobs have already been lost as a result of technological advances.
As has been said, in the 1950s and 1960s technological advances in the pits led to increased output per shift and a loss of jobs. That is even more true of the posts and telecommunications industry, in which there has been a massive increase in productivity and a loss of jobs. The industry has gone along with successive Governments. It has been too tame. As a result, thousands of jobs have been lost in the wealth-creating part of the economy, which is the very part that Tories always talk about. They talk about the manufacturing sector of industry to the exclusion of the service sector and the public sector. It is as if they do not matter.
The principle of hiving off could result in the loss of many more jobs. My hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) said that he was not an expert on the subject of the number of jobs that could be lost. My hon. Friend the Member for Blaydon (Mr. McWilliam) knows a thing or two about the industry. He explained how jobs would be lost. My hon. Friend the Member for Bethnal Green and Bow no doubt listened closely and will realise that a considerable number of jobs will be lost.
I hark back to yesterday's rally. It seems a long time ago—

Mr. Anderson: It is a matter not only of the numbers of jobs lost but of the effect on rural areas. I know that my hon. Friend is deeply concerned about that. For a long time the Conservative Party has posed as the defender of rural interests. There has been a 20p increase in the price of petrol and an effect on bus services, and we are now faced with the Bill. Such provisions show the fraud involved. Those who live in the rural areas of Scotland, Wales and England will be adversely affected, because the more profitable parts will be creamed off and the corporation will not be able to provide services to those in rural areas who have a legitimate right to expect them.

Mr. Skinner: There can be no doubt that areas such as my hon. Friend's constituency—which is semi-rural—and mine will suffer the most. Most rural areas are represented by Conservative Members and by Liberals.

Those who have been attacked will vote against the Tories in the county council elections in May. There can be no doubt about that.
Hiving off is another nail in the Government's coffin. The Tories will suffer massive defeats in the elections. The rally of thousands of Post Office and telecommunications workers was important because they wanted to express their doubts about the future of their industry. That is why my hon. Friend the Member for Bethnal Green and Bow and I, along with the many others who attended the rally in Central Hall, could take account of the fears that they expressed and of their demoralised state.
One sector of the industry went without a strike for God knows how long.

Mr. Stott: Ninety years.

Mr. Skinner: As my hon. Friend the Member for Westhoughton (Mr. Stott) says, for 90 years. We had one in the other section that was not terribly successful, but it produced results later for other industries which finally resulted in the downfall of the last Tory Government in 1973. Who knows, if there is further job loss in that area it could result in action outside that might result in the Prime Minister making a similar about-turn as she did when the miners had a week off. That was the kind of spirit displayed at the rally yesterday. It was quite remarkable. Every time the Secretary of State or the Prime Minister were mentioned, there were great jeers.

Mr. Deputy Speaker: Order. It is the matter of granting licences which is of relevance at the moment.

Mr. Skinner: I agree that the amendment is about licences. Some of the people from Bolsover, North-East Derbyshire and Chesterfield said to me in the Lobby afterwards, "Why don't you get rid of them? Stay up all night, if necessary, and fight the Bill.". Those are the instructions that we had. I have heard some Tories in their corners in the Lobby giving pledges here and there.

Mr. Cryer: We shall fight it tooth and nail.

Mr. Anderson: My hon. Friend said that he would not yield to that temptation.

Mr. Skinner: I made it clear that I would be lighting the Bill tooth and nail, line by line and clause by clause. The traditional phrases were all trotted out to indicate that we were in business. When my hon. Friend the Member for Bethnal Green and Bow rose at that meeting, he said "Yes, we shall do that. I have an extra spare pair of pants and a new shirt, because"—

Mr. Deputy Speaker: Order. I have had the good fortune to be out of the Chair for an hour or two. Ii seems to me that precisely the same observations are being made by the hon. Member for Bolsover (Mr. Skinner) now as he was making then.

Mr. Skinner: Not about a change of clothing, Mr. Deputy Speaker; that is a new point. All this hiving off and loss of jobs comes on top of the loss of jobs through technology. That is a double blow, and is why the Secretary of State should understand the fears in the hearts and minds of those thousands who turned up today—and they were not the only ones who wanted to be there. They were only the delegates from the branches. It was not a mass lobby on the basis of everyone coming, because there was a suggestion to have a one-day strike to bring them


all here. We shall look forward to that in the future. They represented all their branches from the communications industry and from the other—

Mr. Deputy Speaker: Order. I hope that the hon. Gentleman will refer to the amendments in the very near future.

Mr. Skinner: I was trying to explain that not only is it a matter of hiving off but that the industry has been suffering from the cuts in public expenditure.

Mr. Cryer: Will my hon. Friend accept that in relation to amendment No. 28 the Minister will no doubt argue that in his judgment the effect of the legislation in hiving off will be to create jobs, because of the plethora of licensing and, therefore, private enterprise development? Will he compare the Minister's experience and knowledge of the telecommunications industry and the knowledge and experience of the telecommunications industry of the lobby that he was with this afternoon and the retrospective judgments that have been made—

Mr. Deputy Speaker: Order. I cannot see a reference to any of that in the amendments.

Mr. Cryer: On a point of order, Mr. Deputy Speaker. This matter was raised before you resumed the Chair by my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo). The tenor of the debate earlier from at least two Conservative Members was that by granting licences under the provisions of legislation which the amendments seek to limit and remove there will be an opportunity for private manufacturers to be able to get into the telecommunications industry. The argument adduced to support that is that further jobs will be available. Therefore, the experience in the industry in considering whether more or fewer jobs will be lost is relevant in assessing support for the amendments.

Mr. McWilliam: Further to the point of order, Mr. Deputy Speaker. Not only has it been adduced that jobs may be lost in one sector but created in another, but it can be construed from the arguments that the private sector jobs may not necessarily be in this country. That is the point that my hon. Friend the Member for Bolsover (Mr. Skinner) was making.

Mr. Jim Marshall: Further to the point of order, Mr. Deputy Speaker. The amendment seeks to remove—[Interruption.] Perhaps you could ensure, Mr. Deputy Speaker, that my hon. Friend the Member for Westhoughton (Mr. Stott) desists from speaking.

Mr. Deputy Speaker: I ask for the assistance of the whole House in that regard.

Mr. Marshall: It is dreadful that an hon. Member should waste the time of the House in that way when a point of order is being raised.
The amendment seeks to remove clause 15(1)(a) which refers to licence being granted
by the Secretary of State after consultation with the Corporation".
Hon. Members should therefore be able to seize on any point pertaining to the corporation's future business. It should be in order to deal with the corporation's future operation. We should be able to discuss all aspects of the corporation's business.

Mr. Deputy Speaker: The amendments deal with the question of granting licences. The hon. Member for Bolsover (Mr. Skinner) is in order if his arguments relate to granting licences.

Mr. Marshall: Further to that point of order, Mr. Deputy Speaker. The amendment seeks to remove clause 15(1)(a), which defines the procedure for granting licences. If that subsection is to be removed the House should be able to discuss any part of the corporation's business, so the discussion so far has been too restricted. [Interruption.] I must object, Mr. Deputy Speaker. The hon. Member for Watford (Mr. Garel-Jones) and the hon. Member for the constituency which I forget—[HON. MEMBERS: "Carshalton."] I am informed by my hon. Friends that it is Charshalton. I wish that it was the far east of Scotland, so that—

Mr. Foulkes: Withdraw.

5 am

Mr. Marshall: I apologise, Mr. Deputy Speaker. I appear to have run into some difficulty with my hon. Friends. I withdraw any imputation of derogatory comments that I may have directed towards the hon. Member for Carshalton (Mr. Forman).
The amendment, if accepted, would withdraw all the consequences of clause 15(1)(a), so permitting the House to discuss not only licences but any business that the corporation might now be doing or seek to do after the passage of the legislation. I ask you, Mr. Deputy Speaker, to rule that the House should be able to discuss not only the licences that may be issued by the corporation but any aspect of the business.

Mr. Skinner: I had intended to remark that the amendment is both modest and reasonable, but it cannot be both. It is, however, a fairly modest attempt to try to water down the Bill. In Committee and on Report, it is necessary—

Mr. Marshall: I am grateful to my hon. Friend the Member for Bolsover (Mr. Skinner) for giving way. I cannot agree that the amendment is too moderate. The amendment seeks to delete clause 15(1)(a), which refers to
the Secretary of State after consultation with the Corporation".
I wish my hon. Friend would define "the Corporation". I also draw his attention to clause 15(9)—if my hon. Friend the Member for Keighley (Mr. Cryer) will refrain from chattering—which states
Any sums received by the Secretary of State under this section shall be paid into the Consolidated Fund.
How does my hon. Friend expect the Secretary of State, after consultation with the corporation, to pay into the Consolidated Fund any sums of money that may be due to him?

Mr. Skinner: I stand by my original statement that this is a fairly modest amendment. Otherwise, it would have proposed to delete the clause completely. The amendment asks the Minister to accept half a loaf and shows that we are prepared to go some distance along the way. It is recognised that in Committee the intention is to enable arguments relating to a clause to be put. The amendment is more than a probing amendment, because it would change the format of the clause and curtail the Secretary of State's powers.

Mr. Cryer: If the amendment were passed it would curtail the Secretary of State's power to grant licences to manufacture equipment—licences that might well take jobs away from the United Kingdom, because there is no requirement in the Bill that equipment made under licence should be manufactured in the United Kingdom. It could be made in Japan or anywhere in the Common Market.

Mr. Skinner: My hon. Friend has been reading my notes. I am slowly moving towards that part of my speech. I still say that this is a relatively modest amendment—not a moderate amendment. My hon. Friend the Member for Newcastle-under-Lyme has spelt out the fact that there is no control over where the jobs will go. If the Tory Government argue that overall there will be no loss of jobs, because the work will go to entrepreneurs, the problem arises as to who those entrepreneurs are. Will they be in this country? My hon. Friend mentioned, as an example, IBM and the tremendous amount of lobbying that it has been doing.

Mr. Anderson: The important thing is that under the clause the Government would be able to impose certain conditions. It is a disgrace to the House that the Government are not setting out clearly here what sort of conditions they have in mind.
For example, one condition might be that none of the business could go, directly or indirectly, to any foreign company. I am sure that it would, at least in part, satisfy my hon. Friend if the Government said that in terms. It is wrong that they have not spelt out in detail what conditions they have in mind to protect our domestic industry and to meet my hon. Friend's legitimate point.

Mr. Jim Marshall: Will my hon. Friend the Member for Bolsover (Mr. Skinner) direct his attention to the right-hand side of page 17 of the Bill? [Interruption.] I should be obliged if my hon. Friends would refrain from making sedentary comments. On the right-hand side of page 17 we read:
Saving for things done under a licence".
The amendment is to remove subsection (1)(a), which reads:
by the Secretary of State after consultation with the corporation".
What saving can be made after a consultation with the corporation by the Secretary of State? [Interruption.] I have grown accustomed to the interventions of the hon. Member for Watford (Mr. Garel-Jones).

Mr. Deputy Speaker: Order. The hon. Gentleman seems to have difficulty in making himself heard and controlling the House. He will have noticed that all other speeches have been listened to in complete silence. Only he is having trouble.

Mr. Marshall: I think that is true, but I am sure that you are aware, Mr. Deputy Speaker, that I am making not a speech but an intervention in the speech of my hon. Friend the Member for Bolsover.

Mr. Deputy Speaker: Order. I was under the impression that the hon. Gentleman was trying to make a speech. It is a very long intervention.

Mr. Marshall: I appreciate that, Mr. Deputy Speaker, but my hon. Friend has intimated on more than one occasion that he is prepared to accept interventions.

Mr. Deputy Speaker: Order. The hon. Member for Bolsover is not the person who decides whether a long intervention is in order; it is the Chair. I was asking the hon. Gentleman to bring his remarks to a close.

Mr. Marshall: I appreciate that, Mr. Deputy Speaker, and I withdraw any imputation to the Chair about long interventions.
I was drawing my hon. Friend's attention to the amendment to delete clause 15(1)(a). I was also drawing his attention to the heading at the right-hand side of page 17, which says:
Saving for things done under a licence.
That is what the Bill seeks to do. Yet there is no mention of savings in the long title, the short title or any title. How does my hon. Friend reconcile those facts?

Mr. Skinner: There is a contradiction, but that is not a matter for me. The contradiction is the responsibility of the Tory Party, which has introduced the Bill. Of course, there will be no savings, but no doubt in every Bill that the Government bring in they will say that there will be great economies and benefits for the whole population, that it is in the national interest, and that there will be wonderful profits for some. Of course they will say that. However, I take no notice of the heading on the right-hand side of page 17 of the Bill. I am sure that there will be no savings. So we must emphasise the dangers that are involved in the hiving off.
I was about to mention imports. The hiving off takes no account of where the new products will be made. The balance of payments will be seriously disturbed by the hiving off, in that there is no guarantee that the business will remain in the United Kingdom.
Whole sections of industry have been obliterated during the past two decades—not only under this Government, although I must say that the rate has accelerated during the past 20 months. The Bill will allow firms overseas to move in and take over these sections of industry. We shall see countries of the Common Market benefiting, as will American companies.
Exchange controls have been lifted so that money can be invested abroad, and I have no doubt that some of the Tories' friends have invested money in multinational companies which will reap the benefit. They will not provide British jobs, but there will be a lot of pocket money for the Tories' friends who asked the Government to lift exchange controls. There will be a loss of jobs in Britain and a gain of jobs in the Common Market, America and Japan. We shall lose on every issue. Another indigenous British industry will be smashed, and Plessey and the rest will come under the hammer.
5.15 am
The Tories talk about the need to get rid of demarcation problems. My hon. Friend the Member for Blaydon referred to problems that will arise over installations. Imagine all the tin-pot employers trying to compete in the telecommunications industry. Many trade unions will be involved and the result will be a multitude of demarcation arguments—not necessarily at the trade union level, because most demarcation disputes are caused by employers, and the trade unions argument is a defensive response.
Bearing in mind the massive number of unemployed and the cuts in public expenditure, which have caused a great loss of jobs in the industry, we should ensure that


those in the industry have a sliding scale of hours, depending on the amount of new technology that is introduced. If it were agreed by the unions that advancing technology could mean a loss of jobs, there should be a reduction of hours, first to, say, 35 a week, without loss of pay, and subsequently to a 32-hour, four-day week.
That is the answer, not merely in relation to the Bill but in all areas where technology is moving apace and resulting in the loss of job opportunities. The Government should provide for that, but they will not do so. The Labour Party must take it on board. It is no use our Front Bench spokesmen wringing their hands over unemployment. We must have some answers. It is no use proposing a different form of monetarism. That will not be sold to the electorate when we go to the country.
We must say to our people and our class that—

Mr. Deputy Speaker: Order. We are not dealing with what the hon. Gentleman has to say to his people. We are dealing with the amendments and what he has to say to the House.

Mr. Skinner: I an trying to emphasise that I am facing the problem of technology in the telecommunications industry. The Government's answer is to hand out jobs to those overseas in order to gain fat profits for themselves. I suggest that the answer for our class is to spread the hours around so that we keep people in employment in telecommunications and everywhere else. That is one of the answers to the problems facing us. The Bill brings us starkly up against those problems, and we must provide the answers for the electorate when we face them.

Mr. Orme: We have had an extensive debate and we wish to proceed to a Division on the amendment. The debate has concerned breaking the monopoly and transferring to the Secretary of State powers to grant licences and to direct the corporation to grant licences if he wishes. The Bill changes the telecommunications industry from a public corporation to a private company and breaks up the corporation by selling the most profitable parts to the private sector. We are opposed to that.
As I told the lobby that came to the House yesterday, the Opposition intend to restore the monopoly when we return to power. We warn people who think that they can make a quick buck that they may have their fingers burnt. The monopoly is in the interests of the corporation. It is profitable, and it operates new technology. It should remain under State control. There is a fundamental difference between the Secretary of State's approach and ours.

Mr. Anderson: Does my right hon. Friend agree that the change is likely to deter the corporation from investing further because of possible privatisation? Will that not hobble the corporation in its task?

Mr. Orme: I accept that. The Bill will have an effect on the corporation's forward planning and research and development. There is no secret about the Secretary of State's policy. He has outlined it on many occasions. He is carrying out the policy in the Bill. It is right for us to state our policy. We are diametrically opposed to the Secretary of State's policy and philosophy.

Mr. Jim Marshall: Will my right hon. Friend direct his attention to the amendment, which seeks to delete the word "consultation"? Does he agree that consultation with the Secretary of State is not possible? Consultation with a future Labour Government will be possible. In such circumstances a more profitable corporation could be built than that which the Government seek to privatise.

Mr. Orme: I take that point. Our intention is to consult the workers about our approach.

Mr. Gorst: I was listening carefully to the right hon. Gentleman's commitment on behalf of a future Labour Government. It was qualified by the assumption that the industry's fortunes will be reduced under the proposed system. If the industry prospers beyond anything in the past, will that commitment hold?

Mr. Orme: I have made a firm commitment that we believe in the public monopoly and that we shall restore that monopoly, regardless. I have been asked a straight question and I am giving a straight answer to the hon. Gentleman.

Mr. Peter Snape: Far be it from me to put words into my right hon. Friend's mouth, because he knows far more about the Bill than does the hon. Member for Hendon, North (Mr. Gorst), who has just intervened. Could he ask the hon. Gentleman, who made his name in somewhat different circumstances from those appertaining to the Bill, which sector of private industry is particularly profitable at the moment under the policies espoused and embraced by the right hon. Gentleman the Secretary of State for Industry?

Mr. Orme: I take the point that my hon. Friend has made but, returning to the question of the monopoly, I think that, as some of my other hon. Friends have said, my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) spelt out the case very clearly and covered most of the aspects of what this break-up of the monopoly means. This is on the postal side as well as on the telecommunications side. I think that that point has been clearly made. The Liberal point of view has also been put this evening. Instead of getting into an argument with the hon. Member for Liverpool, Edge Hill (Mr. Alton), I suggest that he puts his vote where his voice is and votes on amendment No. 35 tonight, so that the Liberal point of view can be firmly put on record. We shall watch with interest to see whether he divides the House and carries through his conviction when we vote.
I want to raise with the Minister of State the question of the PABX exchanges and the new proposal that he made in answer to his hon. Friend the Member for Cornwall, North (Mr. Neale) on 31 March in a written answer, when he said:
the Government have concluded that the measures to relax the telecommunications monopoly should include competition"—
and so on, dealing with the programmes and automatic branch exchanges:
This will apply to all such equipment, of approved design, which is installed after the date when PABXs generally are liberalised."—[Official Report, 31 March 1981; Vol. 2, c. 81–2.]
That obviously means a new development. In Committee, as he is aware, he said:
I have listened carefully to the arguments that have been put to me. I am receiving representations all the time from both sides on the question. I emphasise 'both sides'. I cannot say that the Government will change their mind."—[Official Report, Standing Committee B; 20 January 1981, c. 259.]

Mr. Charles R. Morris: Could my right hon. Friend also ask the Minister of State why that parliamentary reply was tabled on 31 March and not during the Committee stage of the Bill, and why it was tabled at a time that pre-empted the tabling of amendments to deal with this situation?

Mr. Orme: I was coming to that point, because it is a very important one and it has caused a great deal of consternation in the industry, as my right hon. Friend is probably aware. Like many of my hon. Friends, I have received representations. There is this contradiction between what the Minister said in Committee and what the Government have decided, and to the Opposition it looks very much as though the Secretary of State has given way to the pressures for turning over to the private sector the future PABX development. I hope that the Minister will present the House with a full explanation.
We find the clause highly unsatisfactory. We find that the powers to be granted to the Secretary of State are against the interests of British Telecommunications. When the Minister has replied, I ask my right hon. and hon. Friends to divide on this crucial amendment.

Mr. Kenneth Baker: It is not a matter of dispute between us that the amendment and the debate that we have had upon it go to the nub of the Bill. That was the opinion of the hon. Member for Newcastle-under-Lyme (Mr. Golding) when he introduced the amendment some hours ago. This is a central clause in the Bill and a part that concerns the derogation from the telecommunications monopoly. We debated it at length in Committee and it is entirely appropriate that we should be debating it again on Report.
The amendments would have the effect of removing the Secretary of State's powers to licence the running of telecommunication systems. They clearly run contrary to the principle of empowering the Minister to intervene to ensure that the monopoly is relaxed. In the most important areas they would leave British Telecommunications with the last word over what competing systems were to be allowed. This is in fundamental conflict with our total approach to the Bill. There is a clear and philosophical divide between us that the right hon. Member for Salford, West (Mr. Orme) emphasised when he said that a Labour Government would seek to restore the public monopoly.
The Government do not intend to ignore BT's interest. I agreed in Committee to amendments to require the Secretary of State to consult British Telecom before issuing a licence under the clause and to allow him to require licensees to make a payment to BT. The Bill as originally drafted provided that licence payments would be paid into the Exchequer.
We consider that the relaxation of the monopoly, the Government's initiative, and pursuance of their policy should primarily be carried out by the Secretary of State, who is answerable to Parliament. The hon. Member for Liverpool, Edge Hill (Mr. Alton) now agrees with us. In Committee he argued fluently for having a system similar to that operated in America, namely, a Federal Communications Commission. I set out the reasons why the Government considered that that was not the way forward. Such a system would be excessively bureaucratic. It is a system from which America is moving away as a result of legal developments over the past four

or five years. We think that the matter is handled properly by leaving the powers of licensing and, therefore, the derogation of the monopoly in the hands of the Secretary of State, who is answerable to Parliament and who may be called to account by the House in respect of the way in which he uses the powers.
That answers most of the matters raised by the hon. Member for Edge Hill, save that he said that he would like to see everybody licensed, including BT. I can understand that. That case has been put to us. We have rejected it because it would be excessively cumbersome for us to set about the administrative arrangements of licensing the various activities and services of British Telecom.

Mr. Alton: I should like the Minister to deal with the letter that I sent to the Secretary of State a week ago.

Mr. Baker: Yes, I have a note on that. I appreciate the hon. Gentleman's concern about that matter. His comments and anxieties are somewhat speculative. The financing of British Telecom's investments is under review. I cannot comment on the future of individual plants manufacturing telecommunications equipment while the review is in progress. I assure the hon. Gentleman that the Government are aware of Plessey's interest in BT's investment programme and are taking that fully into consideration. I have noted the concern that lie has expressed.
It will be helpful in removing uncertainty from the minds of hon. Members if I deal with the powers in the Bill that would be used to accomplish liberalisation in each of the three main areas outlined by my right hon. Friend the Secretary of State.
The areas concerned were the competitive supply of all sorts of terminal apparatus, greater freedom of use of the public network to provide services to third parties—which are called value added network services in the jargon—and the exploration of the scope for competition in the supply of transmission services as such, that is to say, additional networks. Those are three distinct areas.
Clause 15 covers the licensing of the running of telecommunications systems. Complementing it is clause 16, which deals with the approval of individual terminal apparatus. Many hon. Members have focused on that aspect. With regard to apparatus, therefore, liberalisation will in the main be accomplished through the powers of clause 16. We envisage giving a general license to the British public to purchase equipment approved under the systems that I explained earlier, through the British Standards Institution and the British Electrotechnical Approvals Board. I am advised, however, that the more complex types of apparatus, such as PABXs, constitute systems in their own right, and so will be liberalised under the licensing powers in clause 15.
Value added network services can take many forms and will employ a wide variety of apparatus. In most cases, some form of system will be employed, for which licensing would be required under clause 15.
The powers in that clause will also be needed if the Government decide to allow competition in the provision of transmission services for third party use. Opposition Members have expressed particular concern that the growth of competition directly with the main network would take profits away from BT, resulting in tariff increases and a reduction in service standards. That is not necessarily so. The plain fact is that at present BT is not


able to meet the demand for its services. All over the country, business subscribers complain to me that delays in providing telecommunications services are striking at the roots of their businesses, endangering employment.

Mr. Anderson: rose—

Mr. Baker: I would prefer to reply to the debate. I have given way a great deal to the hon. Members who have been present during most of the debate. Therefore, I am not inclined to give way to the hon. Member for Swansea, East (Mr. Anderson).
I was asked several questions about PABXs. My hon. Friend the Member for Fife, East (Mr. Henderson) asked why I decided, after consideration of the matter, that liberalisation should be extended to digital and not analogue exchanges. That is of considerable concern to me, with my responsibilities for the network and its integrity. The key difference between the two is that even in the relaxation, BT must be satisfied that the network's integrity is retained. With digital stored programme-controlled PABXs it is possible to test from a remote station and to ensure that integrity. That was one of my major concerns, and that is why there is a difference.
My hon. Friend asked me whether there could be a separation between maintenance, as between the company that supplied the equipment and a service company that wanted to provide maintenance. I confirm that that is so. The customer will be able to decide to buy either from BT or from a private supplier. After all, the equipment has been approved, and he will have the further choice of being able to decide whether he wants a maintenance contract with the supplier of the equipment, or with the maintenance company, or with the maintenance services of BT. I expect that in one of the enterprises that we discussed earlier BT could provide separate maintenance, to compete on the maintenance level.
The approval of maintenance contractors should be carried out in line with the general approval apparatus. The right hon. Member for Salford, West chided me for tabling the question yesterday. I assure him that since I have been a Minister I have probably given more time to the consideration of PABX maintenance than to any other matter.
I have had to take advice from a wide range of sources—from the industry itself, from the users, from BT and from my professional advisers. I made it clear in Committee that I was not prepared to make a quick decision, but I felt that I had to make a decision by the time that we reached Report. I thought it a matter of courtesy to tell the world yesterday, through the House, of that decision.
I spoke to Mr. Stanley, of the POEU and to Sir George Jefferson, of the Post Office, as soon as the decision had been taken. That has enabled us to discuss PABX maintenance. I am sure that the decision that we have taken is absolutely correct.

Mr. Warren Hawksley: Will a private operator who is providing the PABXs be able to insist on a service contract? If a customer gets a box from a private supplier, will he be free to receive maintenance from wherever he likes, or will the supplier be able to insist that it should be done by him?

Mr. Baker: I think that I have just dealt with that question. The equipment can be purchased either from BT or from an approved supplier. The customer can go to the supplier for maintenance, or to BT, or to a third party, as long as the third party is approved and is not a fly-by-night operator.
Several hon. Members referred to the job anxiety that the derogation from the monopoly might create. I should like to dispel that anxiety. Labour Members are far too defensive and pessimistic. The licensing system that we will operate and the liberalisation regime that will flow from the licensing system will permit other companies to engage in profitable enterprises and create new jobs outside BT. [HON. MEMBERS: "Outside Britain."] Not necessarily outside Britain. In my judgment, it will be principally within Britain.
We can draw some succour and support from the experience in America. In the last three years, what has happened in America is similar to the regime that will operate in this country after vesting day. Over the last three years, the employment figures in the American Telephone and Telegraph Company have increased substantially. That is the comparison with BT. We also find that the number of people working in the private sector in America, which provides the competitive services, which we shall now allow British firms to provide, has increased substantially.
I believe that the liberalised regime based upon the American experience will show that revenue, profits and jobs will increase.

Mr. Neale: Is it not true that among those in the forefront of the lobby that we should privatise more, particularly with regard to the maintenance of PABXs, were the leaders of the electrical trade union, on behalf of those working in the private sector who could envisage the expansion?

Mr. Baker: I have received representations from several unions that have been by no means in agreement with each other. Some wanted the maintenance monopoly retained, and some wanted liberalisation.
The opportunities that will exist after the liberalised regime is operating will be immense. That is one of the most important measures which the Government will be seen to have introduced during this Parliament. We are changing an industry from being dominated and controlled by monopoly to being driven by the force of competition. It will be good business for many British firms. It will create jobs. It will provide an increased consumer choice. For all those reasons, the amendments should be rejected.

Mr. Jim Marshall: I sense that the House wishes to move towards a decision on this group of amendments. I find that difficult to understand, as the amendments relate to the words:
The Secretary of State … after consultation with the Corporation".
I have been listening to the debate for the past hour, as have many of my right hon. and hon. Friends. Having listened to the Minister's contribution, if I were in his place I should pack my bag tomorrow morning, because his boss, the Secretary of State for Industry, has been asleep for the past 40 minutes.

Mr. Snape: Two years.

Mr. Marshall: Having spent a considerable amount of time in Leeds, I should say 16 years. Nevertheless, we are referring to the activities that the right hon. Gentleman now undertakes.
The House is being asked to place confidence in the Secretary of State for Industry in any consultations that he might have with the corporation. I ask my right hon. and hon. Friends, some of whom are getting restless, whether they would place any confidence at all in the competence of the right hon. Gentleman in consultations or discussions to reach any kind of reasonable agreement.

Mr. Foulkes: None whatever.

Mr. Marshall: It becomes a little trying when one of my hon. Friends continues to shout from a sendentary position, as I am tempted to give way to him.

Mr. Foulkes: I was merely saying that I have no faith whatever in the Secretary of State for Industry. In that, I agree entirely with my hon. Friend.

Mr. Marshall: I am grateful to my hon. Friend for extremely small mercies.
The amendment relates to having confidence in the Secretary of State to consult the corporation. I do not think that any Labour Member could have any confidence in the ability of the Secretary of State to consult anyone. If that is so, it seems that we must vote against the amendment. Over the past two years we have had many illustrations of the Secretary of State's dilatoriness. If I were a psychiatrist—which God forbid, if I may use that expression in this place—I should begin to feel very sorry for the Secretary of State.

Mr. Deputy Speaker: Order. That hardly comes within the terms of the amendment.

Mr. Marshall: I appreciate your ruling, Mr. Deputy Speaker, but the amendment relates to the words
The Secretary of State … after consultation with the Corporation".
If one is to look at that amendment in the round, one must have complete security, understanding and assurance that the Secretary of State will carry out his responsibilities in the way in which the Crown would wish them to be carried out. My point is that there are grounds for believing that the present Secretary of State for Industry is incapable of carrying out those responsibilities.

Mr. Deputy Speaker: Order. That does not seem to me to relate to the amendment.

Hon. Members: Yes, it does.

Mr. Marshall: Some of my hon. Friends seem to think that it does, Mr. Deputy Speaker, but in view of your ruling I shall go no further down that road.

Mr. Skinner: The Minister referred to this area. My hon. Friend is on the same track, except that he is putting a different point of view.

Mr. Marshall: My hon. Friend can always put a different interpretation on any point of view. On this occasion, I agree with him.
We are discussing how BT will be able to diversify. I wish that some hon. Members could be on the British Nationality Bill at 10.30 this morning, but failing that, perhaps we can examine how assistance will come from the United Kingdom or abroad. Nearly six hours ago I was

told—[Interruption.] I get the impression that some hon. Members have come into this debate rather late. If they want to speak, they should get to their feet.
The Minister of State said that the Government are seeking to increase the new corporation's competitiveness by means of expertise from at home or abroad. Those involved in the industry and their unions are convinced, and have sought to convince hon. Members today, that they can do the job as well as anyone overseas. Without the amendment, overseas competitors will have the chance to get into the British industry, which they have sought for 10 or 15 years. The House should deny them that opportunity.

Mr. Anderson: My hon. Friend the Member for Leicester, West (Mr. Marshall) said that the present system is a covert form of import control. The Minister sidestepped the claim that imports will be one certain result of the breach of the monopoly. The United States analogy is spurious, because it started from a different technological base. Its experience over the past three years is hardly relevant to likely events in this country following the end of the monopoly.
Because of our international obligations, the Government will be unable to impose any conditions on the relaxation of the monopoly, such as the exclusion of foreign or foreign-related companies. If the market is not going to expand that much faster, that in itself will lead almost certainly to a reduction of jobs. That is something that the Government appear not to have taken on board.

Question put, That the amendment be made:—

The House divided: Ayes 165, Noes 256.

Division No. 137]
[5.55 am


AYES


Abse, Leo
Douglas, Dick


Adams, Allen
Dubs, Alfred


Allaun, Frank
Duffy, A. E. P.


Anderson, Donald
Dunnett, Jack


Archer, Rt Hon Peter
Dunwoody, Hon Mrs G.


Atkinson, N.(H'gey,)
Eadie, Alex


Barnett, Guy (Greenwich)
Eastham, Ken


Benn, Rt Hon A. Wedgwood
Ellis, R. (NE D'bysh're)


Bennett, Andrew(St'kp't N)
English, Michael


Booth, Rt Hon Albert
Ennals, Rt Hon David


Bray, Dr Jeremy
Evans, Ioan (Aberdare)


Brown, Hugh D. (Provan)
Evans, John (Newton)


Brown, R. C. (N'castle W)
Flannery, Martin


Brown, Ron (E'burgh, Leith)
Fletcher, Ted (Darlington)


Brown, Ronald W. (H'ckn'y S)
Forrester, John


Callaghan, Jim (Midd't'n &amp; P)
Foster, Derek


Campbell, Ian
Foulkes, George


Campbell-Savours, Dale
Fraser, J. (Lamb'th, N'w'd)


Cant, R. B.
Freeson, Rt Hon Reginald


Carmichael, Neil
Garrett, John (Norwich S)


Clark, Dr David (S Shields)
George, Bruce


Cocks, Rt Hon M. (B'stol S)
Gilbert, Rt Hon Dr John


Coleman, Donald
Golding, John


Cook, Robin F.
Graham, Ted


Cowans, Harry
Grant, George (Morpeth)


Cox, T. (W'dsw'th, Toot'g)
Grant, John (Islington C)


Cryer, Bob
Hamilton, James (Bothwell)


Cunliffe, Lawrence
Hamilton, W. W. (C'tral Fife)


Cunningham, G. (Islington S)
Hardy, Peter


Dalyell, Tam
Harrison, Rt Hon Walter


Davidson, Arthur
Hart, Rt Hon Dame Judith


Davies, Ifor (Gower)
Hattersley, Rt Hon Roy


Deakins, Eric
Haynes, Frank


Dean, Joseph (Leeds West)
Hogg, N. (E Dunb't'nshire)


Dempsey, James
Holland, S. (L'b'th, Vauxh'll)


Dewar, Donald
Home Robertson, John


Dixon, Donald
Hooley, Frank


Dobson, Frank
Huckfield, Les


Dormand, Jack
Hudson Davies, Gwilym E.






Hughes, Robert (Aberdeen N)
Robertson, George


Janner, Hon Greville
Robinson, G. (Coventry NW)


John, Brynmor
Rooker, J. W.


Jones, Dan (Burnley)
Ross, Ernest (Dundee West)


Kaufman, Rt Hon Gerald
Rowlands, Ted


Kilroy-Silk, Robert
Sheerman, Barry


Lamond, James
Shore, Rt Hon Peter


Leighton, Ronald
Silkin, Rt Hon J. (Deptford)


Lewis, Ron (Carlisle)
Silverman, Julius


Litherland, Robert
Skinner, Dennis


Lofthouse, Geoffrey
Snape, Peter


McDonald, Dr Oonagh
Soley, Clive


McElhone, Frank
Spearing, Nigel


McGuire, Michael (Ince)
Spriggs, Leslie


McKay, Allen (Penistone)
Stewart, Rt Hon D. (W Isles)


McKelvey, William
Stoddart, David


MacKenzie, Rt Hon Gregor
Stott, Roger


McNally, Thomas
Strang, Gavin


McNamara, Kevin
Straw, Jack


McTaggart, Robert
Summerskill, Hon Dr Shirley


McWilliam, John
Taylor, Mrs Ann (Bolton W)


Magee, Bryan
Thomas, Dafydd (Merioneth)


Marshall, Dr Edmund (Goole)
Thomas, Jeffrey (Abertillery)


Marshall, Jim (Leicester S)
Thomas, Dr R. (Carmarthen)


Martin, M (G'gow S'burn)
Thorne, Stan (Preston South)


Maxton, John
Tinn, James


Mikardo, Ian
Urwin, Rt Hon Tom


Millan, Rt Hon Bruce
Varley, Rt Hon Eric G.


Mitchell, Austin (Grimsby)
Wainwright, E. (Dearne V)


Morris, Rt Hon C. (O'shaw)
Walker, Rt Hon H. (D'caster)


Morris, Rt Hon J. (Aberavon)
Watkins, David


Morton, George
Welsh, Michael


Moyle, Rt Hon Roland
White, J. (G'gow Pollok)


Oakes, Rt Hon Gordon
Whitehead, Phillip


O'Halloran, Michael
Wilson, Gordon (Dundee E)


O'Neill, Martin
Wilson, William (C'try SE)


Orme, Rt Hon Stanley
Winnick, David


Pavitt, Laurie
Woodall, Alec


Pendry, Tom
Woolmer, Kenneth


Powell, Raymond (Ogmore)
Wrigglesworth, Ian


Price, C. (Lewisham W)
Wright, Sheila


Race, Reg
Young, David (Bolton E)


Rees, Rt Hon M (Leeds S)



Richardson, Jo
Tellers for the Ayes:


Roberts, Allan (Bootle)
Mr. Hugh McCartney and Mr. Frank R. White.


Roberts, Ernest (Hackney N)





NOES


Aitken, Jonathan
Brown, Michael(Brigg &amp; Sc'n)


Alexander, Richard
Browne, John (Winchester)


Alison, Michael
Bruce-Gardyne, John


Alton, David
Bryan, Sir Paul


Ancram, Michael
Buck, Antony


Arnold, Tom
Budgen, Nick


Aspinwall, Jack
Bulmer, Esmond


Atkins, Robert (Preston N)
Butcher, John


Atkinson, David (B'm'th, E)
Carlisle, John (Luton West)


Baker, Kenneth (St. M'bone)
Carlisle, Kenneth (Lincoln)


Baker, Nicholas (N Dorset)
Chalker, Mrs. Lynda


Banks, Robert
Channon, Rt. Hon. Paul


Beaumont-Dark, Anthony
Chapman, Sydney


Beith, A. J.
Churchill, W. S.


Bendall, Vivian
Clark, Hon A. (Plym'th, S'n)


Bennett, Sir Frederic (T'bay)
Clark, Sir W. (Croydon S)


Benyon, Thomas (A'don)
Clegg, Sir Walter


Benyon, W. (Buckingham)
Cockeram, Eric


Best, Keith
Corrie, John


Bevan, David Gilroy
Cranborne, Viscount


Biffen, Rt Hon John
Critchley, Julian


Biggs-Davison, John
Crouch, David


Blackburn, John
Dean, Paul (North Somerset)


Bonsor, Sir Nicholas
Dorrell, Stephen


Bottomley, Peter (W'wich W)
Douglas-Hamilton, Lord J.


Bowden, Andrew
Dover, Denshore


Boyson, Dr Rhodes
du Cann, Rt Hon Edward


Bright, Graham
Dunn, Robert (Dartford)


Brinton, Tim
Durant, Tony


Brittan, Leon
Dykes, Hugh


Brooke, Hon Peter
Eden, Rt Hon Sir John


Brotherton, Michael
Eggar, Tim





Fairbairn, Nicholas
Marland, Paul


Faith, Mrs Sheila
Marshall, Michael (Arundel)


Farr, John
Mates, Michael


Fenner, Mrs Peggy
Mather, Carol


Finsberg, Geoffrey
Maude, Rt Hon Sir Angus


Fisher, Sir Nigel
Mawhinney, Dr Brian


Fletcher, A. (Ed'nb'gh N)
Maxwell-Hyslop, Robin


Fletcher-Cooke, Sir Charles
Mayhew, Patrick


Forman, Nigel
Mellor, David


Fowler, Rt Hon Norman
Meyer, Sir Anthony


Fox, Marcus
Miller, Hal (B'grove)


Fraser, Peter (South Angus)
Mills, Iain (Meriden)


Fry, Peter
Mills, Peter (West Devon)


Gardiner, George (Reigate)
Miscampbell, Norman


Gardner, Edward (S Fylde)
Moate, Roger


Garel-Jones, Tristan
Monro, Hector


Gilmour, Rt Hon Sir Ian
Montgomery, Fergus


Glyn, Dr Alan
Moore, John


Goodlad, Alastair
Morgan, Geraint


Gorst, John
Morris, M. (N'hampton S)


Gow, Ian
Morrison, Hon C. (Devizes)


Gower, Sir Raymond
Morrison, Hon P. (Chester)


Grant, Anthony (Harrow C)
Mudd, David


Gray, Hamish
Murphy, Christopher


Greenway, Harry
Neale, Gerrard


Griffiths, E. (B'y St. Edm'ds)
Needham, Richard


Griffiths, Peter Portsm'th N)
Nelson, Anthony


Grist, Ian
Neubert, Michael


Grylls, Michael
Newton, Tony


Gummer, John Selwyn
Onslow, Cranley


Hamilton, Hon A.
Oppenheim, Rt Hon Mrs S.


Hamilton, Michael (Salisbury)
Osborn, John


Hampson, Dr Keith
Page, Rt Hon Sir G. (Crosby)


Hannam, John
Page, Richard (SW Herts)


Haselhurst, Alan
Parris, Matthew


Hastings, Stephen
Patten, Christopher (Bath)


Havers, Rt Hon Sir Michael
Pawsey, James


Hawkins, Paul
Percival, Sir Ian


Hawksley, Warren
Pink, R. Bonner


Heddle, John
Pollock, Alexander


Henderson, Barry
Porter, Barry


Heseltine, Rt Hon Michael
Price, Sir David (Eastleigh)


Hill, James
Proctor, K. Harvey


Hogg, Hon Douglas (Gr'th'm)
Pym, Rt Hon Francis


Hooson, Tom
Raison, Timothy


Howell, Ralph (N Norfolk)
Rathbone, Tim


Hunt, David (Wirral)
Rees-Davies, W. R.


Jenkin, Rt Hon Patrick
Renton, Tim


Jessel, Toby
Rhodes James, Robert


Johnston, Russell (Inverness)
Rhys Williams, Sir Brandon


Jopling, Rt Hon Michael
Rifkind, Malcolm


Joseph, Rt Hon Sir Keith
Rost, Peter


Kellett-Bowman, Mrs Elaine
Sainsbury, Hon Timothy


Kershaw, Anthony
Scott, Nicholas


King, Rt Hon Tom
Shaw, Giles (Pudsey)


Knight, Mrs Jill
Shelton, William (Streatham)


Knox, David
Shepherd, Colin (Hereford)


Lamont, Norman
Shepherd, Richard


Lang, Ian
Shersby, Michael


Latham, Michael
Silvester, Fred


Lawrence, Ivan
Sims, Roger


Lawson, Rt Hon Nigel
Skeet, T. H. H.


Lee, John
Smith, Dudley


Le Marchant, Spencer
Speed, Keith


Lennox-Boyd, Hon Mark
Speller, Tony


Lester, Jim (Beeston)
Spicer, Jim (West Dorset)


Lewis, Kenneth (Rutland)
Spicer, Michael (S Worcs)


Lloyd, Peter (Fareham)
Sproat, Iain


Loveridge, John
Squire, Robin


Luce, Richard
Stanbrook, Ivor


Lyell, Nicholas
Stanley, John


McCrindle, Robert
Steen, Anthony


MacGregor, John
Stevens, Martin


MacKay, John (Argyll)
Stewart, Ian (Hitchin)


Macmillan, Rt Hon M.
Stewart, A.(E Renfrewshire)


McNair-Wilson, M. (N'bury)
Stokes, John


McNair-Wilson, P. (New F'st)
Stradling Thomas, J.


McQuarrie, Albert
Taylor, Teddy (S'end E)


Madel, David
Temple-Morris, Peter


Major, John
Thatcher, Rt Hon Mrs M.






Thomas, Rt Hon Peter
Watson, John


Thompson, Donald
Wells, John (Maidstone)


Thorne, Neil (Ilford South)
Wells, Bowen


Thornton, Malcolm
Wheeler, John


Townend, John (Bridlington)
Whitelaw, Rt Hon William


Townsend, Cyril D, (B'heath)
Whitney, Raymond


Trippier, David
Wickenden, Keith


Trotter, Neville
Wiggin, Jerry


van Straubenzee, W. R.
Wilkinson, John


Vaughan, Dr Gerard
Williams, D.(Montgomery)


Viggers, Peter
Winterton, Nicholas


Waddington, David
Wolfson, Mark


Wakeham, John
Young, Sir George (Acton)


Waldegrave, Hon William
Younger, Rt Hon George


Walker, B. (Perth)



Waller, Gary
Tellers for the Noes:


Ward, John
Mr. John Cope and Mr. Robert Boscawen.


Warren, Kenneth

Question accordingly negatived.

Amendment made: No. 29, in page 17, line 43 leave out
'system falling within subsection (1) of section 12' and insert 'telecommunication system'.—[Sir Keith Joseph.]

Mr. Mikardo: A little under four hours ago I moved, That further consideration of the Bill be now adjourned. In reply, the Minister said that he thought that we should seek to make a little more progress. On the grounds of that observation I sought and obtained leave to withdraw the motion.
Since then we have disposed of 26 amendments. We have had two major debates and two votes. That, and the time that has elapsed, justifies my again moving that further consideration of the Bill be now adjourned. [Hon. Members: "No."] Most of the hon. Members who are shouting "No" have not been in the Chamber all the time, and therefore they do not know what has been happening and what still has to go on. Perhaps I should spell that out. I am not being contumacious about this, and I was not before, but I understand that the Government business managers would like to get the Bill through without losing any more Government time. That is no longer possible.
The choice before the Government business managers is to provide some time next week to complete the Report stage or to provide some time next week for the business for today—Thursday—which will otherwise be lost. We still have 49 amendments to deal with. Some are purely formal. We have six major debates. I shall explain what they are to those hon. Members who have just come in. The Minister will need no reminding. We still have major debates on cash limits and pensions of the employees of the corporation. We still have to debate the complicated business of exclusive privilege. There will need to be a major debate on postal monopoly, similar to that which we have just concluded on telecommunications monopoly. We also have to deal with the third Bill contained in the overall Bill—Cable and Wireless, which has not yet even been mentioned. Finally, we have the Third Reading debate.
If each major debate takes two hours, which is less than the average for a major debate so far, the total is 12 hours. In addition, we shall have six Divisions on those debates, plus four deferred from a previous debate, which will take three hours. The best that we can hope for is 15 hours, which takes us a little past dinner-time this evening and wipes out today's business.
I suggest to the Minister in a most friendly way that he should consider whether to continue. I do not mind. I am as fresh as a daisy. Since 3.30 pm I have not moved out of this joint—if hon. Members will forgive me for calling

the dump a joint—except for half an hour. However, I suspect that many hon. Members would prefer to break off now. If I were on the Government Benches and if continuing the debate would save a day's business, I should be in favour of carrying on, but it will not do so, even with the best will in the world. I therefore invite the Minister to consider the practicalities.
I beg to move, That further consideration of the Bill be now adjourned.

Mr. Kenneth Baker: I am grateful to the hon Member for Bethnal Green and Bow (Mr. Mikardo) for the way in which he has again moved the motion. When he moved it four hours ago I advised the House to make further progress. I am glad to say that we have done so. I do not complain about the nature of the debates. Although there has been a slight temptation here or there, there has not been excessive filibustering. The debates have been good.
The hon. Gentleman said that he was as fresh as a daisy—a daisy by any other name.… I, too, am fresh—I do not know what is fresher than a daisy—as are several of my right hon. and hon. Friends. I thank them for supporting us in making progress. They are enthusiastic to see the Bill on to the statute book, because we consider it to be a major part of the liberalisation programme that will turn an industry from being driven and dominated by monopoly to one being driven by competition. It would be advisable and sensible to make further progress.
Throughout the debate I have been lectured about the great rally in Central Hall yesterday afternoon. I have been told again and again that the two issues of greatest concern are the investment flow into British Telecom and the pension funds. They are the next two debates. If right hon. and hon. Members on the Opposition Benches wish to reflect the interest shown at the rally we should get on with them.

Question put, That further consideration of the Bill be now adjourned:—

The House divided: Ayes 54, Noes 252.

Division No. 138]
[6.15 am


AYES


Adams, Allen
Janner, Hon Greville


Allaun, Frank
Jones, Dan (Burnley)


Alton, David
Lamond, James


Atkinson, H.(H'gey,)
Litherland, Robert


Beith, A. J.
Lofthouse, Geoffrey


Benn, Rt Hon A. Wedgwood
McNamara, Kevin


Bennett, Andrew(St'kp't N)
McTaggart, Robert


Booth, Rt Hon Albert
Magee, Bryan


Brown, Hugh D. (Provan)
Marshall, Dr Edmund (Goole)


Brown, Ron (E'burgh, Leith)
Marshall, Jim (Leicester S)


Cant, R. B.
Maxton, John


Cook, Robin F.
Mikardo, Ian


Cowans, Harry
Moyle, Rt Hon Roland


Cunliffe, Lawrence
Powell, Raymond (Ogmore)


Deakins, Eric
Price, C. (Lewisham W)


Dixon, Donald
Race, Reg


Douglas, Dick
Richardson, Jo


Duffy, A. E. P.
Roberts, Allan (Bootle)


Ellis, R. (NE D'bysh're)
Ross, Ernest (Dundee West)


English, Michael
Thorne, Stan (Preston South)


Evans, Ioan (Aberdare)
Varley, Rt Hon Eric G.


Flannery, Martin
Wilson, William (C'try SE)


Fletcher, Ted (Darlington)
Winnick, David


Forrester, John
Woodall, Alec


George, Bruce
Young, David (Bolton E)


Grant, George (Morpeth)



Hardy, Peter
Tellers for the Ayes:


Holland, S. (L'b'th, Vauxh'll)
Mr. Bob Oyer and Mr. Dennis Skinner.


Home Robertson, John







NOES


Alexander, Richard
Garel-Jones, Tristan


Alison, Michael
Gilmour, Rt Hon Sir Ian


Ancram, Michael
Glyn, Dr Alan


Arnold, Tom
Goodlad, Alastair


Aspinwall, Jack
Gow, Ian


Atkins, Robert (Preston N)
Gower, Sir Raymond


Atkinson, David (B'm'th, E)
Grant, Anthony (Harrow C)


Baker, Kenneth (St. M'bone)
Gray, Hamish


Baker, Nicholas (N Dorset)
Greenway, Harry


Banks, Robert
Griffiths, E.(B'y St. Edm'ds)


Beaumont-Dark, Anthony
Griffiths, Peter Portsm'th N)


Bendall, Vivian
Grist, Ian


Bennett, Sir Frederic (T'bay)
Grylls, Michael


Benyon, Thomas (A'don)
Gummer, John Selwyn


Benyon, W. (Buckingham)
Hamilton, Michael (Salisbury)


Best, Keith
Hampson, Dr Keith


Bevan, David Gilroy
Hannam, John


Biffen, Rt Hon John
Haselhurst, Alan


Biggs-Davison, John
Hastings, Stephen


Blackburn, John
Havers, Rt Hon Sir Michael


Bonsor, Sir Nicholas
Hawkins, Paul


Boscawen, Hon Robert
Hawksley, Warren


Bottomley, Peter (W'wich W)
Heddle, John


Bowden, Andrew
Henderson, Barry


Boyson, Dr Rhodes
Heseltine, Rt Hon Michael


Braine, Sir Bernard
Hill, James


Bright, Graham
Hogg, Hon Douglas (Gr'th'm)


Brinton, Tim
Hooson, Tom


Brittan, Leon
Howell, Ralph (N Norfolk)


Brooke, Hon Peter
Hunt, David (Wirral)


Brotherton, Michael
Jenkin, Rt Hon Patrick


Brown, Michael (Brigg &amp; Sc'n)
Jessel, Toby


Browne, John (Winchester)
Jopling, Rt Hon Michael


Bruce-Gardyne, John
Joseph, Rt Hon Sir Keith


Bryan, Sir Paul
Kellett-Bowman, Mrs Elaine


Buck, Antony
Kershaw, Anthony


Budgen, Nick
King, Rt Hon Tom


Bulmer, Esmond
Knight, Mrs Jill


Butcher, John
Knox, David


Carlisle, John (Luton West)
Lamont, Norman


Carlisle, Kenneth (Lincoln)
Lang, Ian


Chalker, Mrs. Lynda
Latham, Michael


Channon, Rt. Hon. Paul
Lawrence, Ivan


Chapman, Sydney
Lawson, Rt Hon Nigel


Churchill, W. S.
Lee, John


Clark, Hon A. (Plym'th, S'n)
Lennox-Boyd, Hon Mark


Clark, Sir W. (Croydon S)
Lester, Jim (Beeston)


Clarke, Kenneth (Rushcliffe)
Lewis, Kenneth (Rutland)


Clegg, Sir Walter
Lloyd, Peter (Fareham)


Cockeram, Eric
Loveridge, John


Cope, John
Luce, Richard


Corrie, John
Lyell, Nicholas


Cranborne, Viscount
McCrindle, Robert


Critchley, Julian
MacGregor, John


Crouch, David
MacKay, John (Argyll)


Dean, Paul (North Somerset)
Macmillan, Rt Hon M.


Dorrell, Stephen
McNair-Wilson, M. (N'bury)


Douglas-Hamilton, Lord J.
McNair-Wilson, P. (New F'st)


Dover, Denshore
McQuarrie, Albert


du Cann, Rt Hon Edward
Madel, David


Dunn, Robert (Dartford)
Major, John


Durant, Tony
Marland, Paul


Eden, Rt Hon Sir John
Marshall, Michael (Arundel)


Eggar, Tim
Mates, Michael


Fairbairn, Nicholas
Maude, Rt Hon Sir Angus


Faith, Mrs Sheila
Mawhinney, Dr Brian


Farr, John
Maxwell-Hyslop, Robin


Fenner, Mrs Peggy
Mayhew, Patrick


Finsberg, Geoffrey
Mellor, David


Fisher, Sir Nigel
Meyer, Sir Anthony


Fletcher, A. (Ed'nb'gh N)
Miller, Hal (B'grove)


Fletcher-Cooke, Sir Charles
Mills, Iain (Meriden)


Forman, Nigel
Mills, Peter (West Devon)


Fowler, Rt Hon Norman
Miscampbell, Norman


Fox, Marcus
Moate, Roger


Fraser, Peter (South Angus)
Monro, Hector


Fry, Peter
Montgomery, Fergus


Gardiner, George (Reigate)
Moore, John


Gardner, Edward (S Fylde)
Morris, M. (N'hampton S)





Morrison, Hon C. (Devizes)
Squire, Robin


Morrison, Hon P. (Chester)
Stanley, John


Mudd, David
Steen, Anthony


Murphy, Christopher
Stevens, Martin


Neale, Gerrard
Stewart, Rt Hon D. (W Isles)


Needham, Richard
Stewart, Ian (Hitchin)


Nelson, Anthony
Stewart, A.(E Renfrewshire)


Neubert, Michael
Stokes, John


Newton, Tony
Stradling Thomas, J.


Onslow, Cranley
Taylor, Teddy (S'end E)


Oppenheim, Rt Hon Mrs S.
Temple-Morris, Peter


Osborn, John
Thatcher, Rt Hon Mrs M.


Page, Rt Hon Sir G. (Crosby)
Thomas, Rt Hon Peter


Page, Richard (SW Herts)
Thompson, Donald


Parris, Matthew
Thorne, Neil (Ilford South)


Patten, Christopher (Bath)
Thornton, Malcolm


Pawsey, James
Townend, John (Bridlington)


Percival, Sir Ian
Townsend, Cyril D, (B'heath)


Pink, R. Bonner
Trippier, David


Pollock, Alexander
Trotter, Neville


Porter, Barry
van Straubenzee, W. R.


Price, Sir David (Eastleigh)
Vaughan, Dr Gerard


Proctor, K. Harvey
Viggers, Peter


Pym, Rt Hon Francis
Waddington, David


Raison, Timothy
Wakeham, John


Rathbone, Tim
Waldegrave, Hon William


Rees-Davies, W. R.
Walker, B. (Perth)


Renton, Tim
Waller, Gary


Rhodes James, Robert
Ward, John


Rhys Williams, Sir Brandon
Warren, Kenneth


Ridley, Hon Nicholas
Watson, John


Rifkind, Malcolm
Wells, John (Maidstone)


Rost, Peter
Wells, Bowen


Sainsbury, Hon Timothy
Wheeler, John


Scott, Nicholas
Whitelaw, Rt Hon William


Shaw, Giles (Pudsey)
Whitney, Raymond


Shelton, William (Streatham)
Wickenden, Keith


Shepherd, Colin (Hereford)
Wiggin, Jerry


Shepherd, Richard
Wilkinson, John


Shersby, Michael
Williams, D.(Montgomery)


Silvester, Fred
Wilson, Gordon (Dundee E)


Sims, Roger
Winterton, Nicholas


Skeet, T. H. H.
Wolfson, Mark


Smith, Dudley
Young, Sir George (Acton)


Speed, Keith
Younger, Rt Hon George


Speller, Tony



Spicer, Jim (West Dorset)
Tellers for the Noes:


Spicer, Michael (S Worcs)
Mr. Spencer Le Marchant and Mr. Carol Mather.


Sproat, Iain

Question accordingly negatived.

Mr. Christopher Murphy: On a point of order, Mr. Deputy Speaker. I seek your guidance. On such important legislation as this, is it in order that the Leader of the Opposition should not be in his seat, when the Prime Minister is in her seat?

Mr. Deputy Speaker: That is not a matter for the Chair.

Clause 16

APPROVAL OF APPARATUS WHICH IS TO BE CONNECTED TO A SYSTEM RUN BY THE CORPORATION

Mr. Michael Marshall: I beg to move amendment No. 36, in page 19, line 12, leave out 'a standard so approved' and insert
an approval under this subsection'.

Mr. Deputy Speaker: With this we may take Government amendments Nos. 37 and 38, and the following amendments:
No. 39, in page 19, line 14 at end insert
and conditions which must be complied with as to the connection of such apparatus directly or indirectly to any such


systems and the use of such apparatus in direct or indirect connection with any such system, if it is to be so connected or used'.
No. 40, in page 19, line 14, at end insert—
`(1A) Neither the Secretary of State nor a body appointed by him shall approve standards under subsection (1)(a) or (b) of this section, as the case may be, unless he or it is satisfied that compliance with the standards concerned, in respect of the apparatus specified therein, will:

(a) minimise the risk of any loss, damage or injury to consumers or staff or the Corporation;
(b) minimise the risk of damage to the Corporation's system;
(c) minimise mis-operation of the Corporation's system or interference with the system;
(d) minimise interference to the service of other users or the Corporation's system;
(e) ensure compliance with recommendations of the Consultative Committee on International Telephones and Telegraphs where practicable;
(f) ensure a satisfactory standard of transmission performance where the apparatus is connected to the specific Corporation's network for which it was designed;
(g) ensure provision of appropriate connection facilities for compatibility with complementary wiring and connecting points installed by the Corporation; and
(h) ensure compatibility with the Corporation's call metering equipment'.
No. 41, in page 19, line 14, at end insert—
`(1B) Without prejudice to the powers to approve standards conferred by subsection (1), standards which have been proved to be defective or have become defective through the passage of time may be withdrawn by the Secretary of State, after consultation with the Corporation or, after such consultation as aforesaid, by a person or body appointed for the purpose of approving standards under subsection (1)(b) of this section, and may be replaced by a new standard which may specify whether or not, or for what period of time, apparatus conforming to the withdrawn standard may remain connected or be newly connected to any system run by the Corporation'.
Nos. 42 and 43, which are Government amendments.
No. 44, in page 19, line 27 [Clause 16], at end insert
'including conditions as to the connection of such apparatus directly or indirectly to that system and the use of such apparatus in direct or indirect connections with that system'..
Nos. 45 and 46, which are Government amendments.

Mr. Marshall: These amendments deal with a number of points that were raised during the Committee proceedings on the clause, and with amendments tabled by the hon. Member for Newcastle-under-Lyme (Mr. Golding). Amendments Nos. 37 and 43 make it clear that the conditions that can be imposed on approved apparatus extend to the use of the apparatus in question and the practical detail of its connection to the network. As the Bill is drafted, these conditions have to be included in the standard itself. On reflection, it does not seem appropriate that such conditions should be included in the standard itself, which will be concerned with the technical specifications of the equipment, and amendments Nos. 36 and 38 provide for the conditions to be imposed when approving the standard. This is essentially a drafting change, and will make no difference to the imposed conditions.
Some doubt was expressed in Committee on the question whether the clause allowed standards in individual approach to be withdrawn or varied if they became out of date or needed to be changed for some other reason. Amendment No. 45 puts that beyond doubt, and amendment No. 46 is consequential.
Amendment No. 42 adds an extra degree of flexibility to subsection (2) by allowing the Secretary of State to delegate his power to approve individual apparatus. It will

still be necessary for BT to be consulted, and the Secretary of State will be able to delegate his power in a limited area if he so wishes.

Mr. Golding: To whom is it intended to delegate those powers?

Mr. Marshall: The matter will need to be considered. I cannot give the hon. Gentleman a reply now, but I hope to do so later.
I was saying that the Secretary of State will be able to delegate his power in a limited area if he so wishes. That brings subsection (2) into line with subsection (1), which already includes a power to delegate.
The amendments are clear, and I commend them to the House.

Mr. Golding: I welcome the Government amendments, but I am sorry that the Government have not agreed to table an amendment on terminal apparatus standards. In Committee the Under-Secretary recognised the importance of such standards. He said that they were not a proper subject for detailed legislation. I have given the matter further consideration and read through his remarks, but I still believe that it would be preferable to have the matter dealt with in legislation. Perhaps he will repeat the assurance that he gave in Committee, that the Secretary of State would not approve any standard that did not meet the criteria that were laid down in my amendment.

Mr. Michael Marshall: I am happy to repeat the assurance given in Committee.

Amendment agreed to.

Amendments made: No. 37, in page 19, line 13, after "apparatus", insert
or its connection or use".

No. 38, in page 19, line 14, leave out "that standard" and insert
the standard to which the approval relates".

No. 42, in page 19, line 20, leave out "or" and insert—
() after such consultation as aforesaid, by a person or body appointed for the purpose by the Secretaryof State; or".

No. 43, in page 19, line 26, after "conditions", insert
as to the apparatus or its connection or use".

No. 45, in page 19, line 27, at end insert—
(2A) Any power conferred by subsection (1) or (2) to issue an approval includes power, exercisable in the like manner and subject to the like conditions or limitations to vary or withdraw any approval issued in the exercise of that power.".

No. 46, in page 19, line 41, leave out
the approval of a standard

and insert
an approval, or the variation or withdrawal of an approval".—[Mr. Michael Marshall.]

Mr. Michael Marshall: I beg to move amendment No. 47, in page 20, line 13, at end insert—
(7) For the purposes of this Part, any apparatus a function of which is—

(a) to emit sounds or signals with a view to their being conveyed by a telecommunication system; or
(b) to receive sounds or signals which have been so conveyed,
shall be treated as connected to a telecommunication system at any time if, at that time, sounds or signals emitted by it are being conveyed by that system or, as the case may be, it is receiving sounds or signals which have been so conveyed; and references to apparatus which is to be, or is capable of being, connected to a telecommunication system shall be construed accordingly."
The amendment is designed to deal with apparatus that, although not electrically connected to the network, either directly or indirectly, is nevertheless designed and


intended to interact with the network. An example is an acoustically coupled modem. I am sure that hon. Members agree that such apparatus should be covered by the approvals procedure, and I hope that the House will approve the amendment.

Amendment agreed to.

Clause 18

DEEMED CONTRACTS IN CERTAIN CASES

Mr. Michael Marshall: I beg to move amendment No. 49, in page 21 leave out lines 43 and 44.

Mr. Deputy Speaker: With this we may take Government amendment No. 50.

Mr. Marshall: Subsection (2) deems the making of certain entries, termed "special entries", in telecommunications directories to be done under contract. BT will therefore have contractual liability for any errors and omissions. Our policy is to impose that liability where a charge is made for an entry but not where an entry is made without a special charge. "Special entry" was accordingly defined in the Bill to exclude the single entry provided free for each subscriber. But subscribers living in certain areas such as the outskirts of London receive free entries in more than one directory. The amendments amend the definition of "special entry" to reflect our policy more accurately by excluding quasi-contractual liability from arising in respect of all entries in directories other than those for which a special charge is made.

Amendment agreed to.

Amendment made: No. 50, in page 22, line 1, leave out from second 'entry' to end of line 2 and insert
'for which a special charge is made;'.—[Mr. Michael Marshall.]

Clause 23

BORROWING POWERS OF THE CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

Mr. Orme: I beg to move amendment No. 51, in page 24, line 20, leave out clause 23.

Mr. Deputy Speaker: With this we may take amendment No. 70, in page 60, line 25, leave out clause 71.

Mr. Orme: The amendments are probing amendments, because that is the only way that we can debate cash limits and consider the Government's handling of cash limits and BT's finances.
We are talking about the amount of money needed for BT. For example, BT wants to invest about £2,200 million a year, at current prices, for the next four or five years. It has tried to do nearly all that from its internal resources, but after two price increases, and in the current deep recession, it can do so no longer.
In addition, raising prices further would be grossly unfair to customers and would amount to extremely bad financial management. Long-term investment should be financed by long-term capital. More external finance is urgently needed. It is against that background that we are discussing the cash limits, and we shall want to go into the

matter in detail. We want a detailed explanation of current financing and what the future is likely to be for British Telecommunications.
In March the 1980–81 figure of £78 million was grudgingly extended by the Government to £225 million. However, for 1981–82 it is reduced to £180 million. All suggestions about raising alternative finance, such as Telecom bonds, have been rejected. Even with Telecom bonds, most of the corporation's finance would still be found internally. The current financial limits are inadequate by up to £500 million a year.
British Telecom investment is being cut, orders are being cancelled, and jobs are being lost in supplying industries as a direct result of inadequate finance. It is monetarism gone mad. The Government are supposed to want investment in growth industries, yet they are preventing that happening in British Telecom, the technological industry of the future. Surely it is a winner on any terms. It needs Government support and investment.
I am sorry that the Secretary of State does not intend to reply to the debate, because we have heard him argue that British Telecom investment would crowd out the private sector. That is nonsense. Private invesment is continuing to decline fast, as the Government's figures show. That is because of lack of demand, not a shortage of finance, and because of the high rate of sterling and the MLR.
At a time of deep and damaging recession, large-scale public investment is needed. We believe in investment in wealth-producing assets that will pull the economy foward. The public corporations should be doing that. Preventing them because they are publicly owned is damaging to British industry, and does not make sense. To claim that such investment affects the PSBR and is therefore unclean is to let monetarist dogma triumph over common sense.
It is now widely accepted that the Government's position is totally unrealistic. The Bank of England's statement yesterday reaffirmed its view that the economic decline has not bottomed out and that the recession is not ending.
Over 95 per cent. of British Telecom's £2,200 million a year investment programme is spent within the United Kingdom. Over 75 per cent., or £1,600 million, goes to private sector companies that desperately need orders.
This is another link between the private sector and the public sector. In our mixed economy they live off each other and it would mean work in the private sector if this investment were to go ahead. I think that it is generally agreed that British Telecom's investment contributes overwhelmingly to the British economy. Nearly two-thirds of the investment goes on the network itself, in particular on telephone exchanges and transmission lines. This is a complex and integrated operation, which must be kept together under British Telecom.
To assume that in some vague way joint ventures, which we discussed in earlier debates, between British Telecom and private companies can be formed to run a telephone exchange is extremely naive. It deliberately ignores the nature of the telecommunications business.
The Government have written in in clause 4 the crucial provision that British Telecom cannot transfer to subsidiaries any of its activities deriving from its exclusive privilege if those subsidiaries are not wholly owned by British Telecom. This means the telecommunications


network. The Government claim that joint ventures are the answer to the British Telecom's financial problems, but they are totally unworkable, because the vast majority of the BT investment is in the network, which cannot be given over to joint ventures.
Therefore, great frustration and anger at the Government's obstinate approach to financing is being expressed. Businesses, residential users and supplying companies are joining in a growing chorus of resentment against the Government. They are being deliberately prevented by the Government from getting a decent service, and the situation can only get much worse unless the Government change their policy. It is vital to prepare now for an upturn in the economy, when huge demands for new services will be made of British Telecom. With planning horizons of five years or more, the short-term financial constraints on the industry at the moment are totally unrelated to the needs of the business and are exceptionally damaging for everybody concerned.
It is against this background, and bearing in mind the serious economic situation in which the Government's cash limits are placing the telecommunications industry at the moment and the uncertainty that has been created by other parts of the Bill dealing with the proposed hiving-off, the ending of the monopoly and the selling off of parts to the private sector that we believe that there should be a long-term planning of financial investment for the British telecommunications industry. That is what we are urging in these amendments, and we urge the Government to see that the necessary finance is made available.

Mr. Golding: I begin by asking the Minister of State—if he is to reply—a question that I asked in Committee, at column 280. I have not yet received a reply, but I understand that and I am making no point about it.
In Committee I asked about the difference between the figures for future investment shown in the Post Office's telecommunications business plan and those shown in the White Paper on March 1980. I should like to know, either tonight or by letter, what is the difference between the figures, so that I can know what future investment in telecommunications is to be.
We firmly believe that cash limits are inappropriate for corporations of the type of British Telecom—corporations that are wealth-producing if there is investment in them. It was particularly absurd that in 1979 the Post Office had to repay £110 million. It is nonsensical for money to be taken out of an expanding and potentially very profitable business. It would have been far better if the money had gone into telecommunications investment.
Throughout the years I have supported an economic pricing policy. I shall not explain my reasons for doing so on this occasion. However, in the present recession there are substantial dangers in increasing prices too much. I put a question mark against the 30 per cent increase in tariffs that we have seen over the past year.
The difficulties that BT has found itself in because of cash limits are equalled by the difficulties that the manufacturers have been in because of the large investment cuts. Over the years it has been a bane of both the Post Office telecommunications service and the manufacturers that Governments of both complexions have pursued stop-go economic policies that have hit industry badly.
6.45 am
In Committee we added to the Bill our amendment allowing British Telecom to borrow from the market. That was extremely welcome. I am only sorry that the Minister has not yet persuaded the Treasury of the wisdom of going to the open market. The investment now is needed badly. The level of investment is less in real terms than in 1970. That is not acceptable, when we are even given a Minister for Industry and Information Technology. The level of investment is inadequate.
I cannot understand how it can be sensible to try to finance investment from revenue. It may be possible to do so on some occasions, but not in a recession. In Committee I referred to a gap of £320 million in the investment programme. The Budget gave welcome relief, but that relief was only £145 million.
British Telecommunications should be able to borrow on the open market. It has an excellent credit rating in New York. It does not make sense that it cannot go to New York and borrow. That would have no impact on financial arrangements in the City of London. It is nonsensical that the fiction should be maintained that because the Government are ultimately responsible for British Telecommunications the public sector borrowing requirement should come into play. It does not make sense to raise money in Britain, either through taxation or from borrowing, to finance British Telecom when it could go to the New York market and obtain all the capital that it requires.
The quicker that we gel rid of this odd PSBR rule the better for British Telecom. I cannot understand why the Treasury sticks doggedly to this rule. It makes it more difficult not only for the Treasury and the Government but for everyone. It is one of the dogmas that get adopted by institutions, and it is time that we abandoned it. That dogma is proving very expensive to British Telecommunications. It is having to abandon profitable projects. It has to abandon projects on the periphery because it has to concentrate on the network. That will cost BT money in the long term. Because of cash limits, it will have to pay higher prices if it is forced to wait to place orders that it could have placed earlier. It is having to place orders in small packets because of the cash limits policy, when it knows that it could order larger amounts, thereby saving money.
The cash limits affect not only BT but private industry. Orders have to be held up because smaller packets have to be purchased. The British manufacturing industry is suffering badly. That is nonsense. It is ridiculous to hold back orders that one knows one wants to place. One could have gone to New York to borrow the money to place them. If they were placed, employment would be created and all the costs of unemployment would be avoided.
It all comes back to the single point of the PSBR dogma in the Treasury. I wish the Minister of State well. I feel that he shares my point of view on this matter, however much we may differ on other matters. If we could obtain a change in that rule in the Treasury—a rule that one of my right hon. Friends introduced in a moment of aberration, not only could we do much good for BT; we could relieve the taxpayer and help bring down interest rates.
Let us work together to try to drive some sense into the heads of the Treasury. As ever, those people will be sleeping somewhere while we are trying to produce economic recovery in Britain.

Mr. Charles R. Morris: I support my right hon. Friend the Member Salford, West (Mr. Orme) and my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) on amendment No. 51. Equally, I want to direct my comments essentially to amendment No. 70, with which my name is associated.
Amendment No. 70 seeks to challenge the Government's use of cash limits, which have the frustrating effect of inhibiting the Post Office's capital investment programme. I am seriously disturbed at the way in which Government policies are damaging the Post Office, which is facing a critical financial situation as a result.
A particular problem is the effect of cash limits in three vital operational areas of the Post Office's activities. Its mechanisation programme is being held up. Cash limits are preventing building replacement and are delaying vehicle replacement programmes.
Over the years there has been a gradual acceptance that major public corporations should be expected to meet certain financial objectives as a measure of their overall performance. I do not disagree with such procedures, but what is gravely disturbing is the confusion and the damaging effects that a simplistic worship of that objective creates. It would be wrong to suggest that the problem in the Post Office is as great as the problem in telecommunications. The capital investment requirements of the Post Office are relatively modest. My right hon. Friend referred to a capital investment programme of £2,200 million. The requirements are £76 million this year and £89 million next year. That shows the absurdity of the Government's attitude to cash limits generally.
Recently the whole question of financial objectives has been overshadowed by the Government's rigorous application of cash limits, or external borrowing limits, on the Post Office and other public corporations. In their blind adherence to a totally unrealistic medium-term financial strategy the Government are raising a measurement of external borrowing into a fundamental financial objective for the Post Office Corporation. They are assessing the performance of the Post Office by a financial yardstick. It is judgment by means, not results. The physical amount of external finance used by the Post Office Corporation does not in itself mean anything. It is the use to which it is put that matters most.
What takes priority in the Government's view? Is it normal financial objectives widely used in business, such as rates of return on net assets, or abnormal, perverse and arbitrary targets, such as the current policy on cash limits? By which is the Post Office to be measured? Who better to pass judgment on the impact on the Post Office than the Monopolies and Mergers Commission, which was asked by the Secretary of State to investigate the inner London letter monopoly. It said in March 1980, in recommendation No. 7:
There is an urgent need to develop plans for mechanised packet sorting".
It said in recommendation No. 8:
We think that the sooner they"—
the mechanisation plans—
are implemented the better and further delay should not be allowed".
It said in recommendation No. 13:
We think that a younger van fleet might be more economical and could obviate the need for the Post Office to increase the proportion of reserve vehicles as they intend".
In paragraph 10.41 it said:

Many buildings provide neither suitable accommodation for their current functions nor good working conditions".
Since the report was published, however, restrictions on borrowing have meant that the Post Office has not been able to press ahead as quickly as it would wish with changes that require capital expenditure. In other words, the Government have been quite happy for other commission recommendations about increased productivity to be implemented but unwilling to enable the Post Office to get on with the investment that the commission recommended.
One needs only to look at the mechanisation difficulties confronting the Post Office at present. The House will be aware that the letter post and parcel post plans are the two major features of current postal mechanisation activity. Those plans, which it was hoped to complete by 1983–84, have now been put back until 1984–85.
Shortage of capital has delayed the Post Office's vehicle replacement programme among its 27,000 vehicles. Sometimes it has even been forced to hire vehicles—and, of course, the older the fleet the higher the maintenance costs.
7 am
At present there are more than 800 Post Office buildings of 80 years of age or more. I recently read reports of the condition of some of these buildings. I invite hon. Members to look at the South-West district sorting office, in Victoria. It is an old prison building, and it is in an appalling state of repair. As a diversion from walking to Victoria, hon. Members might read the comments of a union branch secretary, who reported on the Post Office building at Camberley as follows:
Recently more women are joining the Post Office, unfortunately we have only one toilet available to them, and only two men's toilets available amongst approximately seventy men which are also unhygienically insufficient.
Seating arrangements in our Rest Room are now ludicrous. At the main meal relief times people are now having to eat breakfast in the Drying Room, Kitchen and Sorting Office".
If hon. Members are not moved by that, the branch secretary at Marlow writes:
a large piece of plaster fell from the ceiling to the floor, luckily this was during the night and no one was hurt. We now have to almost swim in the front section of the office when it rains from all the water that comes in. They finally came to fix the fallen piece of plaster wth the scaffolding poles resting on postmen's own individual sorting frames. If that was not enough they worked while people were underneath them working. So you can imagine we are just about up to our necks with what we have had to put up with.
That is an indication of the appalling situation that exists in the Post Office building programme.
Those difficulties stem directly from the rigorous implementation of cash limits that we have seen in recent months under the Conservative Government. I hope that when the Minister replies he will deal with those three points—the impact of cash limits on the Post Office building programme, on vehicle replacement, and on the Post Office mechanisation programme.

Mr. Mikardo: My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) referred to the difficulties being created for those two industries, as for many others, by what he called the dogma of the Treasury. In that, if in nothing else, he will have the warm support of the Minister, who, answering questions after his statement on Cable and Wireless the other day, said


suddenly and, for him, with unaccustomed sharpness and heat, that we must get this enterprise away from the "dead hand" of the Treasury.
Clearly, therefore, the Minister understands perfectly what my right hon. and hon. Friends are talking about. He was right, of course. The obsession with monetarism carried to the most extreme limits and without any consideration for other, and sometimes countervailing considerations, has created a serious situation in many industries, not least the telecommunications industry and the Post Office. Both those industries are now severely under-capitalised. In fact they are starved of capital.
That capital starvation leads to a vicious circle. My right hon. Friend the Member for Manchester, Openshaw (Mr. Morris) gave some examples. If vehicles are allowed to run down, maintenance costs more. The books can be juggled, and it can be called revenue expenditure rather than capital expenditure, but that makes no difference to anyone except a theorist, because the lolly must be paid out in either case. If a vehicle has to be replaced, delay in doing so will increase the cost.
My right hon. Friend referred to building maintenance. The longer one leaves paintwork, the more one damages the woodwork underneath. The longer one leaves the pointing of brickwork, the more it will eventually cost. The arbitrary imposition of cash limits is a false economy; in the end it means more expense.
The delay in installations of new telephones was mentioned earlier. One or two of the younger and more moronic Conservative Members, who pop into the Chamber for 10 minutes every now and again after two hours outside refreshing themselves with potent liquors, jeered at that. But of course there is a delay, because there is not the money for new equipment. A line must be constructed, and that costs money. The delay, under successive Governments, has been entirely due to lack of money.
That too, is a vicious circle. Delay in installation means delaying a new source of revenue. A new telephone creates profit, and the fewer there are the less is the profit. That leads to further under-capitalisation and reduction in revenues.
The Secretary of State and other Ministers often claim that the regeneration of British industry depends on not propping up lame ducks. Instead, they say, we should identify the growth points in technological industry, pick the winners and put our shirts on them. "Pick the companies that are lively, inventive, best managed, and put your money into them instead of staving off the inevitable disaster with the business that is not sound." In other words, go for the anti-lame duck policy. I can see a good deal of substance in that.
Again, the Secretary of State does not practise what he preaches. In British Telecommunications he has an industry that is technologically advanced, profit-making

Mr. McNally: That fulfils all the criteria.

Mr. Mikardo: Far from being a lame duck, it is inventive, well-managed, profitable, expanding, and a generator of internal capital. As my hon. Friend the Member for Stockport, South (Mr. McNally) reminds me, it fulfils every one of the criteria for further investment. Yet such industries are being hamstrung by this blind, obsessive, idiotic, inflexible imposition of cash limits. I

suppose that this will go on for as long as the Chancellor of the Exchequer and the Secretary of State for Industry occupy their respective positions. I do not think that that will be for very long. For as long as it does go on, it is flying in the face of the doctrine that they are practising and preaching every time one of them goes out to dinner as the guest of a chamber of commerce or a City livery company. They preach this doctrine, yet here they are, in an industry for which they are responsible, not practising it at all.
My right hon. Friend the Member for Salford, West (Mr. Orme) quoted figures upon which every hon. Member ought to ponder. I am bound to admit that I did not take them in as quickly as I might have done, but I shall read them with care in the Official Report, because my right hon. Friend was making out a very good case. It is on those grounds—and they certainly appear sufficient—that I support the amendment.

Mr. Reg Race: The arguments put forward by my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) have been succinct. We are talking about the ability of a corporation to borrow money and not be hamstrung by cash limits that impinge on its ability to do its job. Our criticisms of the Bill have to be seen in the context of our criticisms of cash limits generally and the way in which they operate in the public sector. The amendments dealing with this matter draw attention to that. We oppose cash limits. I regret that the Labour Government introduced them. There is a sense in which the cash limits system has been detrimental to the entire public service.
7.15 am
If we wish to criticise the imposition of restrictions on borrowing powers we must criticise the system as a whole rather than the way in which it impinges on a corporation or sector of the economy. My criticism of the cash limit system is that any nationalised corporation—regardless of whether it includes private capital—should have the ability, to fund its services, without too many financial restrictions according to the consumer's needs and according to the demand in the economy. We are arguing for the restrictions on the corporation and on its ability to finance its activities to be swept aside. We argue that it should be able to meet demand at source without cutting back on its activities in an attempt to stay within rigidly imposed, unrealistic cash limits. That is important.
My hon. Friend the Member for Bethnal Green and Bow spoke about the provision of facilities and telephone lines. In my constituency, lack of financial support on the Post Office telecommunications side led to potential subscribers in Tottenham, in the eastern half of my constituency, having to wait for over two years for a telephone line. That delay was the direct result of the failure to invest money in new plant and equipment at the right time, when increases in demand should have been anticipated. In addition, it was the direct result of management's failure to identify the growth in demand.
That example is taken from just one of our 635 constituencies. It illustrates that if financial support to a nationalised industry is restricted there is a risk of seriously undermining the services that the industry can provide for the public good. Cash limits and financial restrictions involve monetarism. Cash limits are imposed to restrict the amount of money in circulation and the ability of corporations to spend beyond a certain limit. The basic


premise is that if the amount of money in circulation and the amount of money that a public corporation or nationalised industry can borow is reduced, inflation will be hindered.
That assumption lies behind these provisions. We must decide whether that assumption is justified. In my view, it is not. There is very little empirical evidence—dare I say, given the recently announced conclusions of 364 economists academic evidence?—to justify it. Indeed, I shall not try to name all those economists, as I do not know all their names. However, they argued that the level of growth in the money supply—part of which represents nationalised industry borrowing and part of which represents the public sector borrowing requirement—was not a major factor in any explanation of the level of inflation.

Mr. Skinner: My hon. Friend referred to the 364 economists. Obviously they have views on the cash limits, borrowing powers, and so on, of BT. I hope that my hon. Friend does not want to give the impression that he is in line with the 364 economists. Many of them would not support the views that my hon. Friend put forward. It is rumoured that a few, though not many, are part of the Social Democratic outfit. I do not want my hon. Friend to think that what they say is gospel. He should tell the House which of the 364 economists he agrees with and which are on a different track altogether.

Mr. Race: It is clear that the economists who put forward arguments about monetarism, cash limits and the way in which they impinged on the economy had different views about the way in which the economy functioned. I have no doubt that some of them take the view that the Government are half wrong. Some take the view that the Government are completely wrong and others take the view that the Government are completely barmy. I support the latter view—that the Government are barmy—and the economists who have supported that line of approach. But they are united. My hon. Friend the Member for Bolsover (Mr. Skinner) is correct, because those economists united on the basis that monetarism, growth in the money supply and the restrictions that have been imposed on it had no real impact on inflation, but had damaging consequences for the corporation and the economy as a whole.

Mr. K. J. Woolmer: Is it not true that not only the 364 economists felt that way but the Confederation of British Industry had the same reservations about the general policies of the Government, feeling that they were leading to a sustained fall in investment, production and employment, but that the Government's problem was that they were cutting capital investment in the areas of the economy in which we should be investing? It is not a question of academic economists only; the people whom the Government might have expected to support them have been criticising them for policies that have led to cutbacks in those areas of progressive industry

Mr. Speaker: Order. Is the hon. Gentleman intervening or making a speech?

Mr. Woolmer: I apologise, Mr. Speaker. I draw to my hon. Friend's attention the fact that it was not just people in academic institutions but the Confederation of British

Industry that made his point. I ask my hon. Friend to comment on that important area of opinion, which has concentrated on the issue under debate.

Mr. Race: It is true that the CBI has made substantial comments on cash limits and the way in which they want the Government's monetary and fiscal policy to operate. Sir Terence Beckett came to visit the Back Bench Group of the Parliamentary Labour Party—I forget which day it was, as the days tend to run into each other. My hon. Friend the Member for Batley and Morley (Mr. Woolmer) was in the chair at that meeting and remembers it as well as I do. Sir Terence Beckett said that he believed that the Government were pursuing a mistaken policy—a policy that would have damaging consequences for the economy as a whole, that would drive unemployment higher and that would not, in the long term, have a lasting effect on inflation. He referred to cash limits and the Government's policy of investment in productive, profitable industries. The burden of his argument was that the Government were restricting investment in areas of the economy where even the CBI believed that there should be expansion.
I shall not list all the examples given by the CBI where State capitalism would be profitable, but they include water, sewerage and electrification of the railways. The CBI believes that more money should be pumped into the economy in such areas to allow public services to expand and productive industry to contribute to restoring full employment and positive growth in place of our present ludicrous negative growth. Such arguments come not only from the Opposition but from the CBI and other industrial friends of the Government—major companies, desperately concerned about the restriction on orders in, for instance, the telecommunications, railway and shipbuilding industries, where the Government have a stake in what happens. If the people in those industries are responsible they will argue for an expansion of public investment, which will in turn create jobs. The amendments will improve the financial ability of public corporations.
Government cash limits can work to the detriment of an industry. Rigidly imposed cash limits distort an industry's plan for growth. The Government may set an unrealistically low target for the public sector borrowing requirement. Industries may have restrictions imposed on their financial viability because of a political decision by the Treasury to place a tight corset on PSBR in a given year. The impact on an industry can be devastating.
A stop-go policy can operate in one financial year. The Social Services Committee criticised the stop-go policy for the NHS. I understand that Select Committees have criticised stop-go policies since 1972. The old Expenditure Committee criticised the way in which, before cash limits were invented, the financial regime impinged on the public sector. The stop-go ordering of hospital equipment resulted in devastation.
The authorities in an industry never know when new restrictions will be imposed. Sometimes they have to spend quickly to get to the end of the financial year before the cash limit runs out and the new one begins. More frequently, where an unrealistic cash limit has been imposed, which has been damaging to them, they cannot spend what is required to maintain existing services. How can the Government argue that that is right?
7.30 am
I do not believe that any Government, Labour or Conservative, should impose cash limits that are rigid in


their application. Any policy of overseeing the amount of financial help given to an industry by the Government has to be pursued by other means. It is no good setting targets for nationalised industries and expecting them to maintain their expenditure and their borrowing within those limits without deviation.

Mr. Woolmer: Does my hon. Friend agree that it is ironical how the cash limits and the recession appear to have operated in defence spending, with its bearing on the telecommunications industry? The private sector apparently wished to fulfil orders because it had no other orders. This has resulted in a £400 million-£500 million overspend, beyond cash limits, in the defence industry. This has been beneficial for the telecommunications industry. Does my hon. Friend not agree, however, that the effect of the recession and cash limits in defence has led to a massive breaking of cash limits?

Mr. Race: My hon. Friend is right. It is a scandal that the defence budget has been allowed to overshoot.
Some telecommunications firms have no doubt brought forward their contracts with the Ministry of Defence in order to fulfil them at an earlier date than the Government had thought, because they have no other orders. Anyone who reads the financial press will realise that that is what has happened. It is another nail in the coffin of the system of cash limits. A major Government spending Department has been allowed to overshoot cash limits in a manner that I believe is unacceptable to hon. Members on both sides of the House. Many hon. Members have severely criticised the situation.

Mr. Flannery: Is my hon. Friend arguing that the Government, through clause 23 and their general policy, are proving so parsimonious and are forcing the economy to contract to such an extent that if the Secretary of State can, in an arbitrary manner, curtail funds to the corporation, as has happened in town halls' housing and education, it shows that the argument used yesterday at Question Time about the number of people lying around doing nothing really means that they should be sacked? That would add to the unemployment problem. Does my hon. Friend visualise such a situation arising if the clause stays in the Bill?

Mr. Race: I was intending to deal with that point. The clause would make possible such a situation. One of the consequences of rigid cash limits is that an industry finds itself with insufficient money to get through the financial year while maintaining its current level of activity. The words "current level of activity" mean, in common, everyday language, the level of service to the public and the number of jobs. My hon. Friend is right.
Restrictive cash limits threaten jobs in the supplying industry. This happens in other areas of the economy, such as the NHS, which I know particularly well, where there has been a big problem over the finances of area health authorities. I simply use that as an example, and will not go down that road.
The Government are acting in a shoddy and slipshod way over the clause, which should be removed from the Bill. The planning of a nationalised industry's finances is a very serious matter. The House should pay great attention to it, because large sums of taxpayers' money are involved. We must insist that there is public accountability for money spent, and for that we need a completely new

system of public financing, which acknowledges that the public should play a role in determining the expenditure in the service or industry concerned.
The trade unions have an important role, but we should also open up the whole Public Expenditure Survey Committee exercise, which determines the overall support for nationalised industries and other industries that are outside the trading public sector areas. After the Budget there should be submissions from the public, the trade unions and anyone else who wants to argue about the services that are required and that should be provided by the corporation in the industry concerned. The exercise must start from the assumption that there is a particular level of demand and that the public require a particular level of service.
That is the opposite of the clause, because it gives the Government power to restrict the amount of money that the nationalised industries spend. The Government start from the opposite assumption—that whatever the demand is it must be curtailed within the financial limits that they set.
We should start the PESC exercise by asking trade unions and public bodies, including community groups, to make submissions about the level of service that they want in the telecommunications industry. Ministers consider the expenditure that they regard as desirable in their areas. By July they are beginning to see the kind of expenditure that is envisaged in particular areas of the economy.

Mr. Skinner: Not always.

Mr. Race: Ministers have the disadvantage of not seeing other Ministers' briefs and arguments at that stage. I favour a system in which, when the Ministers start receiving the papers following the submissions from the public, the Treasury and their own spending Departments, those papers are published. Those who had already put in statements in the PESC exercise could then respond to them. That would open out the whole of the telecommunications industry planning procedure to make sure that there was public discussion of the way in which the industry ran its affairs, with an acceptable level of expenditure.
In that way, the demands on the system would be fed in properly, there would be democratic discussion by all bodies about the required level of spending, and there would not be the kind of system proposed in the clause, under which Governments can restrict the amount of money in the interests of monetarism and the public sector borrowing requirement, and in the creation of higher unemployment and of an economy going in a downward spiral towards the depths of despair.
In the financial clauses the Government are proposing an extension of their own financial and economic policy. For that reason alone we must oppose them, because that policy is now so discredited that no Opposition Member could possibly support it.

Mr. Skinner: My hon. Friend should also bear in mind that while this Tory Government have got the PSBR wrong by about £5 billion—it was initially £5 billion, and it was subsequenly amended to £4½ billion in the following financial year—it can happen with any Government. There was a gigantic miscalculation when the Labour Government were in power. So in arguing that a reasonable amount of money should be made available, instead of the cash limits mentioned in clause 23, one has


to find a device to enable the Government, of whichever political shade, to be able to estimate more exactly the amount of PSBR at any one time.

Mr. Race: My hon. Friend is right. In the second year of the cash limits system the amount of under-shoot was so serious that it was equivalent to two major deflationary Budgets. It had a major depresing effect on the economy. That is one reason why I am against cash limits in general. Cash limits in themselves are deflationary, and have deflationary effects on particular industries. They undermine the level of economic growth and employment because of the way in which they are drawn up.

Mr. Flannery: I want to reiterate that unemployment is now soaring at a level far beyond what the Government admit. I believe that it is over 3 million, because of the number of people who have not registered as unemployed.
I do not understand the underlying philosophy of the clause. I got the impression that the Government wanted to add to the number of unemployed. The clause is entitled
Borrowing powers of the Corporation and its wholly owned subsidiaries".
It should read "Restrictions on borrowing powers of the Corporation and its wholly owned subsidiaries".

Mr. Speaker: Order. I remind hon. Gentlemen who are interrupting that if an interruption goes on for too long I shall assume that it is a speech, and the hon. Member concerned will exhaust his right to speak.

Mr. Flannery: I want to put a fundamental question to my hon. Friend. Does he not think that the whole philosophy of this dangerous clause is bound to add to unemployment on a considerable scale? Certainly, it is a blow at the very thing that the Government profess that they want to help.

Mr. Race: There is a great disjunction of values between what Ministers say about the need to innovate, to create more jobs and to have innovative new technology-based industry, and the concept of cash limits. There is a major argument against what the Government profess to believe when they make general statements about their economic policy.
7.45 am
Subsection (7) states:
A person lending money to the Corporation shall not be concerned to inquire whether the borrowing of the money is legal or regular".
That is the most extraordinary subsection that I have ever read. The Government propose that someone lending money to the corporation ought not to be too concerned about what happens to it.

Mr. Mikardo: Not only not concerned about what happens to it, but not concerned whether it is a proper act to lend in the first place.

Mr. Race: My hon. Friend is right. I regard the subsection as a catch-all provision, which would enable the corporation essentially to do what it likes. The Minister is looking at the Bill. There seems to be some uncertainty on the matter. The Minister owes the House an explanation.
The subsection gets worse as it goes on. It says:
or whether the money raised was properly applied".
If the corporation is not to apply the money properly, what the hell will it do with it? Will it be spent on Concordes,

on junkets to Jamaica, or on providing unemployment benefit? What on earth does that mean? Subsection (7) goes on:
and shall not be prejudiced by any illegality or irregularity, or by the misapplication or non-application of any of the money".
That goes against all prudent financial procedures. Presumably it means that if the corporation spends money on something that it should not spend money on, that will be all right, and there will be no public redress. The corporation has the right to do what it likes with money subscribed by the Government or others for public use. The Minister ought to make a statement on that point. It is so weird and extraordinary that my feeble brain is freaked out by it.
My hon. Friends have made it clear that we are concerned not only about the reputability of the financial arrangements to support the industry, but about jobs, stop-go policies in an industry that is forced to restrain itself within a rigid cash limit, and about the way in which Government and other money is applied.
The clause is restrictive, and gives far too many powers to the Secretary of State and the Treasury. The Treasury has to approve some of the borrowing powers in the Bill. I am in favour of removing the clause, because that will remove some of the restrictions on the corporation's activities.

Mr. Cryer: I shall speak first to amendment No. 51, which would delete the clause. It is a probing amendment, to find out the Government's role in the operation of cash limits.
The Government's policy is inconsistent. I assume that the clause is included so that the Government can control the borrowing powers of the corporation. No one will dispute that telecommunications is a high technology industry, with potential growth, even in our stagnant economy. Several hon. Members with knowledge and experience of the industry have said that it is an area of innovation. Why on earth are the Government pursuing close cash limits, particularly when the Department of Industry is positively encouraging the National Enterprise Board to invest in new computer technology and other "whiz-kid" ventures in order to hand them over to private enterprise?
The Government are imposing cash limits on public sector activities because they relate them to the PSBR. That places artificial restrictions on telecommunications, which, by common consent, is an industry with potential growth. The Government's obsession with curbing public sector borrowing is extraordinary.
During a debate on the Queen's Speech some time ago the Minister for Industry and Information Technology—this was at a time when he must have thought that he would never sit on the Front Bench—said, in effect that the wings of the party were like the wings of a bird—the brains were in the centre. He must surely be one of the wets in the Conservative Party who do not regard the public sector borrowing requirement as the great totem of governmental determination.
Despite the Government's determination, the clause does not curb the PSBR. What it does is to increase it, because by imposing cash limits in this artificial way on a public sector corporation that is a potential area of growth and development the Government are creating unemployment. They are doing it more obviously through local government, but this is exactly the same principle.


This means that they are losing tax revenue and they are then, of course, having to pay supplementary benefit and unemployment benefit, and make retraining payments. [AN HON. MEMBER: "Earnings-related benefit."] That is going to finish very shortly, because that is the way in which they are cutting back on the public sector borrowing requirement. But they are producing all sorts of training programmes, which account for around £8½ billion of the PSBR. The extraordinary position is that as the Government curb the PSBR by the imposition of cash limits through clauses like this one, the PSBR, their totem, is actually growing by virtue of the fact that cutting back on the PSBR vitally affects jobs in the manufacturing sector.
Not only that; a significant proportion of public expenditure goes into the private sector. So the Government are starving the very sector of industry that they claim to represent. British Telecom has large contracts with companies such as GEC, Plessey and other providers of equipment and cable, for example. STC is a case in point. It provides a great deal of cable for telecommunications. All these companies, which frequently receive large contracts from British Telecom, have to make people redundant because of the cash limits. They put people on to the unemployed register and therefore increase the payments, and therefore the PSBR.
The other area that is affected is, of course, that of the small firms that feed the larger corporations, such as GEC, by making jigs and tools and fixtures and fittings for small contracts, and for bigger ones. Hon. Members would be deceiving themselves if they thought that small firms could exist in isolation. The vast majority depend on large firms, and when the latter start to lose contracts because of cash limits they, in turn, find the contracts drying up and they, too, have to make people redundant or, if they find that that is not the answer, go to the wall.

Mr. Mikardo: That is the downward multiplier.

Mr. Cryer: It is, indeed.

Mr. Skinner: Is there not another point about small firms, and large ones, for that matter? There have been some estimates made, not necessarily by the 364 economists but by a lot of academics on both sides of the political spectrum, that in terms of public sector cutbacks that could be the result of cash limits such as those described in the clause as much as 70 per cent. to 75 per cent. of all those cuts eventually finds its way back into the private sector, the small firms and the large firms.

Mr. Cryer: I am most grateful to my hon. Friend. I hesitated to provide a figure from memory, but certainly the effect of curtailing the borrowing power in this way might well result in a proportion as high as 70 per cent. or even more failing to find its way into the private sector, so that large, medium-sized and small firms would feel the ripple effect.

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Mr. Mikardo: The Select Committee on Industry and Trade was interested in this. We examined job classes carefully and tried to quantify them. We obtained an estimate from British Leyland—a very large firm, and a main contractor—of how many jobs would be lost by the suppliers and subcontractors, for example, for each job lost in British Leyland. We wanted to establish the ratio of consequential losses to initial losses. The Department

of Industry said that it was 1:1. The chairman of British Leyland pooh-poohd the idea and said that it was between 2·5:1 and 3:1. It is not 75 per cent., it is 250 per cent. plus.

Mr. Cryer: I am grateful to my hon. Friend for his careful addition to my speech. He is able to quantify, while I am not. However, I know that when I was an Under-Secretary of State for Industry the Department directed its attention to two large firms that were given a great deal of financial assistance and subsequently rescued by the Labour Government. The then Conservative Opposition voted against that assistance in both instances. I refer to British Leyland and Chrysler. Those two firms were supplied by no fewer than 10,000 small firms. I refer to manufacturing or service concerns that employ fewer than 200 workers. The effect of curtailment in borrowing powers on a large public corporation like British Telecommunications is paralleled by the effect on the hundreds of small concerns supplying components and services to British Telecommunications, and on several large corporations.
The Minister might say that the Government have to have the powers in the clause, that to remove them as the amendment suggests would be a serious handicap for the Government, and that the Opposition, with their concern for the level of unemployment, are exaggerating the case that cutbacks in public expenditure have an effect on the level of unemployment. The Government never ever use that argument about a particular area of public expenditure—namely, defence. I am certain that British Telecommunications has contracts with the MOD and with the defence industry in a variety of ways, including the provision of services. The parellel that I want to draw is that Ministers continually argue that we must maintain our defence expenditure. They claim that the Russians will come next week if we do not. I trust that the Russians do not know about the various Civil Service strikes. If they find out about them, they are almost certainly going to come.
Apart from that, and to boast of their argument, the Government say that if we do not spend the money thousands of jobs will be lost. That is an argument that they use consistently throughout the whole of the defence debate. If it is true for defence it is true for British Telecommunications. That is one of the factors about which we are expressing concern because of the high level of unemployment.
On temporary borrowing and on long-term borrowing otherwise than by way of temporary loan the clause states:
The Corporation may borrow … in sterling from the Secretary of State or with the consent of the Secretary of State and the approval of the Treasury, in sterling or a currency other than sterling from a person other than the Secretary of State such sums as may be required for … the Corporation or any of its wholly owned subsidiaries.
The corporation must have the consent of the Secretary of State and the approval of the Treasury. We understand the highly centralised organisation of Government Departments, in which the Treasury wishes to hold all the strings and to maintain strong centralised control. However, how would it work? Would the Secretary of State consult the Chancellor of the Exchequer or the Financial Secretary? Do Ministers discuss those matters?
I should like the Minister to reply to those questions, because Members of Parliament do not have the massive number of democratic rights that people outside suppose.


If I tabled a question on this section it would be refused by the Table Office, because it would be a matter of internal government. We are not allowed to ask questions on the internal machinery of government. That is extraordinary, but it is a fact of life. Therefore, it is important that we should know how this section operates. It will condition the potential development of perhaps an important growth area of British Telecommunications.
The Secretary of State for Industry must give his consent. What criteria will he apply? It is extraordinary and completely in contrast with the claims that the Government do not intervene, that they do not want to govern and that they want less legislation. They say that people should make their own decisions. That cry often springs from the Government Benches, and particularly from the Prime Minister. She says that some situation or another has nothing to do with them, but that it is a matter entirely for private enterprise to make a decision. She says that they do not want to spread government everywhere.
That is in complete contrast, because the Secretary of State has to give his or her consent. What criteria will the Secretary of State exercise when that consent is given? Is the consent automatic or routine? If the corporation puts forward a submission, is it routinely accepted? If so, why have it in at all? Cannot the corporation be trusted?

Mr. Skinner: My hon. Friend is trying to establish what the criteria are in the matter of consent. I do not believe that he will receive an answer from the Secretary of State, although I have no doubt that the right hon. Gentleman will attempt to give an answer when he replies to the debate. In many ways, the corporation is not all that different from the National Coal Board, for example. My hon. Friend will reflect that there are occasions when such criteria would have to be thrown out of the window, as happened a few weeks ago, when the miners went on strike. Those criteria would be in jeopardy if the postal and telecommunications workers decided to strike, as they nearly did the other week. My hon. Friend must address himself to that matter.

Mr. Cryer: The other interesting thing about that matter is that if such a crisis arose the Secretary of State would have other powers at his elbow. If the crisis required a rescue, section 8 of the Industry Act 1972, as modified by the Industry Act 1975, could be used, or the right hon. Gentleman could bring in an additional Bill. He has powers to advance considerable sums of money, by way of grant or loan. If it is more than £5 million, he must come to the House for an affirmative order.
The Government eschew intervention, yet they choose to have the consent of the Secretary of State on what seem not extraordinary borrowing powers, as they are not to be used to meet a crisis and carry out a rescue. Perhaps the Minister will say whether it is a crisis. The consent seems to cover a fairly mundane number of situations such as the provision of working capital required by the corportion or any subsidiaries, in subsection (3)(b).
The Government have appointed people to BT, just as they have appointed a chairman of the Post Office. I know that the chairman of the Post Office, Mr. Ron Dearing, is a former deputy secretary in the Department of Industry. No doubt he worked closely with the Secretary of State, and I imagine that the Secretary of State entrusted him with that task in the full knowledge and confidence that he

would carry it out successfully. Therefore, one wonders why BT will not carry out that task on the basis of independence. Why should it be unable to make that independent judgment?
My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) said that BT should be able to obtain finance from the private sector. In my opinion, BT should be able to make that judgment. However, it cannot, because clause 24 states:
The Corporation shall not have the power to borrow money except in accordance with section 23".
that severely limits BT's power.
I should like to see a Secretary of State intervene and discuss investment with the large important public corporations. Indeed, I want to see a Secretary of State discussing investment with the large private corporations through compulsory planning agreements. But we are not talking about a Labour Government; we are talking about a Conservative Government who have often said "These corporations should be able to make their own way in the world and make their own decisions". I should therefore like some elucidation of the points that I have made.

Mr. James Lamond: That section of my hon. Friend's speech was devoted to restrictions on the borrowing powers. Will he now relate the sad story, which he mentioned earlier, about the effects of unemployment? He said that he would mention it, and I have been waiting to hear it.

Mr. Cryer: I referred to the Post Office section, and I shall come to that in a moment. I have not put it out of my mind.
Of course Secretaries of State must have powers. Recently there has been a small splinter from the Labour Party of people who say that they are concerned about parliamentary democracy. One of the duties of an Opposition is to supervise and scrutinise legislation which, among other things, hands over powers to Secretaries of State. Those Secretaries of State do not have to give their consent and then make a report to Parliament. They only give their consent. That right is contained in the Bill.
Successive Parliaments have handed over powers to Secretaries of State without too much probing and thought. There have even been occasions when I have served on a Committee, and have discovered years later how the powers are more widespread than we visualised because of two or three words in the legislation. Therefore, we must exercise scrutiny.
Tonight we are giving powers to the Secretary of State. It is an important parliamentary occasion. But I do not see any of these defenders of parliamentary democracy here to witness the occasion. The SDP Members are not present. If they are serious about their concern for democracy they should realise that this is the place where it is examined.
However many Select Committees we have—and I know that they are important and that many people do a great deal of useful work on them—we do not ever wish to see this Chamber undermined in its scrutiny of legislation. We are carrying out this albeit rather lengthy scrutiny because of our concern, among other things, for the nature of the parliamentary process.

Mr. Skinner: When the Labour Government were in office my hon. Friend used the same arguments about the


need to scrutinise and spent many hours in the Chamber doing the self-same thing. I am therefore not making a party political point here. My hon. Friend is on to the kernel of the clause when he talks of the necessity to scrutinise at length and to probe the powers that are thus handed over. We remember well the devastating spectacle of Ministers trying to squirm out of the problem of the Crown Agents. I shall not go into that very distasteful affair, but I am pleased that my hon. Friend is dealing with that matter. My hon. Friend referred to people going outside this place and talking about those of us who have spent long hours here. I have been here since 11 o'clock and my hon. Friend since about 3 o'clock scrutinising the Bill. Yet those people come out with their parrot phrases, preaching against sin and the rest outside. I have been here since well before midnight, but not one Social Democrat has opened his mouth.

Mr. Cryer: My hon. Friend underlines the strength of my point. I merely add that when people of that ilk make claims about being defenders of Parliament, implying that in some way some of us are not, it annoys me deeply. There are no more fierce defenders of parliamentary process than my hon. Friends and myself, and we are so often here—sometimes to the Government's intense chagrin, I dare say—to prove it.
Amendment No. 70 seeks to remove clause 71. I shall not go into detail as I think that that is the same clause applied to the Post Office. This is a triple Bill, dealing with British Telecom, the Post Office and Cable and Wireless. To call it the British Telecommunications Bill is really a misnomer. That is why so much time has been taken. Again, I must say that another half day would be advantageous rather than continuing through the night. My own loquacity is certainly limited at this time of the morning. Amendment No. 70 is a probing amendment to discover the effect of the cash limits upon the Post Office.
My right hon. Friend the Member for Manchester, Openshaw (Mr. Morris), with his considerable knowledge of the Post Office, pointed out one or two practical instances in which the Post Office is in difficulties. The introduction of mechanical sorting, which is designed to speed the mail, is being hampered. If borrowing powers are limited in the same way as for telecommunications, engineering contracts for the mechanical sorting equipment and the computer control as well will be hampered. I dare say that a case could be made out that, without the efficiency of mechanical sorting—I say that with some hesitation, because great computer installations sometimes diminish efficiency—the hope of improved services will not be realised for years, and business and commerce will suffer. If the Government's expressed concern for business and commerce is serious, there should be investment and improvement in this area.
The record of the Post Office shows that it is prepared to do all it can to improve services despite its difficulties. Over the past five years it has gone from loss to surplus. Even the difficulties of the parcels service have been solved. Therefore, one wonders what the reason is for clause 71, except to impose cash limits on an organisation which, despite its difficulties, has a history of prudent financial management, careful investment and financial surplus.
Some post offices need a face lift, which would mean work for the building industry. About 300,000 building workers are on the dole because of the Government's

policies. We should therefore know their policy towards expenditure by the Post Office on building and on mechanical sorting, for example.
The mention of rundown vehicles by my right hon. Friend the Member for Openshaw is an interesting sidelight on the economic situation. General Motors, which manufactures Bedford vans at Luton, and British Leyland are now in difficulties. We give the latter enormous amounts of money, but by cheeseparing m this clause we are missing the chance to help it by creating demand for its products in a public corporation. It is only one corporation, but it has a considerable fleet and its contracts would be welcome to a vehicle manufacturer.

Mr. Skinner: My hon. Friend, who is doing well, is, I think, edging towards the point that what is lacking in the public sector is interdependence. He mentioned commercial vehicles. Clauses 23 and 71 should provide for some interdependence, instead of cash limits, so that the nationalised industries prop one another up and thereby increase employment prospects throughout the economy.

Mr. Cryer: It is this aspect which causes particular concern on the Labour Benches. We want a successful Post Office. No doubt Ministers will say that they want that, too. They are going the wrong way about it. We are concerned about unemployment and about reducing it. We believe that one of the ways in which this can be done is by injecting money into the public corporations. Here we have two important corporations where this could be done.

Mr. Anderson: My hon. Friend is noted for his objective stance on these issues. Perhaps he could tell the House how much similarity there is between this situation and that of British Rail, in terms of rail electrification. In both cases a substantial amount of investment in the public sector can bring enormous benefits to the private sector because of this interdependence, which is not recognised by the Tories because of the extreme ideological stance that they take on such issues.

Mr. Cryer: That is a useful illustration by way of example. I do not intend to follow it, beyond saying that there is a parallel with the replacement vehicles needed for the Post Office, mentioned by my right hon. Friend the Member for Openshaw. I do not say that the vehicles are run down to the point of danger, but new vehicles would obviously be an enormous boost. The inspecting officer of the Railway Inspectorate, in his last report, drew attention to the dangers arising out of the limit placed on maintenance of track work following curtailed investment. I do not intend to follow that point—

Mr. Speaker: I am glad to hear it.

Mr. Cryer: I thought that it was a useful illustration. The running down of our public institutions is something that we want to reverse. We are constantly hearing of the much vaunted upturn. The Chief Secretary talks of it happening later this year. There are other predictions and we are never quite sure whether we are at the bottom of the recession or slithering down to approach the bottom. When we emerge from the recession we hope that we shall be very busy providing goods and services for all sorts of sectors of manufacturing and service industries. We may not then have the time to invest heavily in public services such as the Post Office and telecommunications. The time to make such investment is not at the upturn, it is now. In that way we contribute to the upturn.

Mr. Skinner: My hon. Friend will recall that some people who are not adherents of the policy that we propose—the CBI, for instance—have recognised that what is needed now is the expenditure of more money to finance firms that are going downhill. Some CBI people who have never been concerned about shedding a few workers are concerned now because they can see their Caribbean holiday at stake.

8.30

Mr. Cryer: My hon. Friend has illustrated a point that I sought to make in my final remarks, to the effect that the provision of public expenditure would help to reverse the trend. The majority of public expenditure goes into the private sector and does not stay in the public sector. Most of the money that the Government spend in the public sector goes into private enterprise. Conservative Members do not seem able to grasp that fact.
Unemployment is created by lack of public expenditure. Small family firms often owe part of their existence to public contracts. Such firms may make Post Office uniforms. A small firm in my constituency is closing. Last Friday, I went round it. Most of the looms are less than four years old.

Mr. Donald Thompson: Looms?

Mr. Cryer: If the Government Whip is raising a query, I should inform him that they weave with looms and make articles such as uniforms with them. I should have thought that he would know something about them. The firm is four generations old and has halved its work force. It now employs 30 people and is a small firm. It has done everything that the Conservative Party wants such firms to do. It has slimmed down and invested in relatively new machinery. Nevertheless, it is going out of business.
It is saddening, because it is a well-maintained mill. People like to work there and have done so for many years. They are particularly skilled in jacquard weaving, yet they will probably go on the dole. In my constituency, Silsden is known for the skill of jacquard weaving. It will suffer further skill erosion. Its traditions will to some extent be put on one side.
That is why we are concerned about these two clauses. What do the Government intend to use them for? What criteria will the Secretary of State use if he wishes to give consent to permanent or temporary borrowings? Are the Government simply using these clauses as a means of restricting borrowing by those two public sector industries? That would have a regressive and deflationary effect. Why are these clauses necessary if they are for any purpose other than the ones that I have described? This legislation is most disheartening for those who spend their lives working in those two industries and who devote their lives in the hope that their loyalty will receive some reward. It undermines their confidence. Clauses 71 and 23 are designed to cut those industries by preventing them from expanding and developing.

Mr. Skinner: rose—

Mr. Cryer: Does my hon. Friend wish to intervene?

Mr. Skinner: rose—

Mr. Speaker: Order. I think that this will be the hon. Gentleman's sixth intervention in the speech of his hon. Friend. The number of interventions is becoming unreasonable.

Mr. Skinner: At 2 o'clock or 4 o'clock I spoke on two or three occasions. I was interrupted many times.

Mr. Speaker: The hon. Gentleman may have been, but he must not continue to interrupt when other hon. Members are addressing the House. If he does so, I shall have to ask him to resume his seat.

Mr. Cryer: I should say, Mr. Speaker, that I was quite happy about that intervention. The interventions have been helpful and have illustrated one or two useful points. I was able to put a few words together, but they helped. It is useful to have a dialogue rather than a monologue.
The net effect of the provisions must be that it is the Government's deliberate policy to cut back on this sort of expenditure in these two sectors of industry, which desperately need the investment. The country, the private enterprise sector and, above all, the workers need the investment to get them back off the dole. If the Government produce these crackpot policies they will not be restricting the public sector borrowing requirement; they will be increasing it. They are the craziest and daftest economics that anyone could pursue.

Mr. Flannery: I shall speak briefly. I had no intention of speaking at all, but this morning at about 6 o'clock I was idly thumbing through the Bill for the umpteenth time when my attention became riveted on clause 23. One of the reasons for wanting to speak on it is because in general the Bill gives such draconian and unfettered power to the Secretary of State that I should have thought that the Conservative party, which always says that it dreads centralisation and want to decentralise, really want to fetter all of us in one of the most centralised ways possible.
In general—and in this clause especially—the Bill gives the Secretary of State unfettered power to do a whole group of things. It enables him to direct the setting up of wholly owned subsidiaries, to direct the disposal of assets—the term used in these days is "privatisation", which means denationalisation and even the issue of monopoly licences. But clause 23, which I want to remove, is almost unique in many ways. In an intervention, I tried to point out that although it describes itself to be about
Borrowing powers in the corporation and its wholly owned subsidiaries
its provisions mean restriction on borrowing powers.
The clause contains what is known as an embarrassment of riches—an embarras de richesse. [Interruption.] It is early, I know.

Mr. Skinner: I do not think that you were in the Chair at the time, Mr. Speaker, but I put a question to the then Prime Minister, the right hon. Member for Sidcup (Mr. Heath). He had just been over to France on one of these Common Market jaunts in his yacht. I put a question in French. I rehearsed it a great deal in the Library. I was only allowed to get about three or four words out before your predecessor put a halt to it. I wonder whether there has been a change in procedure.

Mr. Speaker: Order. I think that the hon. Gentleman got two words out.

Mr. Flannery: In Bolsover they talk of little else but my hon. Friend's fluency in French, which I have always admired.
The clause would appear to suggest that there are no limits on borrowing, but it contains the phrase:
with the consent of the Secretary of State".


It also uses the phrase:
in sterling, or a currency other than sterling".
My mind boggles about borrowing in a currency other than sterling. It goes on:
from a person other than the Secretary of State
"Sterling" crops up again and again. One purpose is:
provision of money for meeting any expenses incurred by the Corporation or any of its subsidiaries".
It appears that money will flow freely to British Telecom, but with his draconian powers the Secretary of State can easily curtail the borrowing powers. He has rigid cash limits at his disposal, which he will use.
The philosophy of the Conservative Party is also implicit in the measure. The fact emerges over and over again—it came up yesterday, at Question Time—that when a person does not function according to the and tenets of monetarism he is accused of lying around doing nothing. I do not know how the Goveernment can make such accusations when they have forced 3 million people to do nothing. They are using unlimited money from North Sea oil to pay 3 million people, who wish to be productive, to do nothing, but when they find a few people in a town hall who they believe are not functioning properly they order the authority to sack them. I therefore wonder what will happen when contraction takes place at the behest of the all-powerful Secretary of State, and money for British Telecom is stopped.
We all know the reason for the Bill. An expanding sector of great profit, which is giving a tremendous and increasing amount of work to many people, needs more and more cash. Through a public corporation we have tried to support a thriving industry, but, with their lust for profit, the Government want to pour the money into the pockets of those who are destroying the bulk of British industry. The Government blandly pretend that the measure will be good for the country, but the clause will mean more and more unemployment. They are contracting industry to balance the books. As I have said before, the books will balance perfectly if we produce nothing and sell nothing. The balance will be nought on either side. That is the philosophy of the Government. This dangerous clause reiterates the Secretary of State's power. It threatens the growing telecommunications industry.
8.45 am
If ever a subsection mirrored the confusion and nonsense that permeates the whole Bill, it is subsection (7). I would like the Minister to explain the wording. The subsection states:
A person lending money to the Corporation shall not be concerned to inquire whether the borrowing of the money is legal or regular or whether the money raised was properly applied and shall not be prejudiced by any illegality or irregularity, or by the misapplication or non-application of any of the money.
What in God's name does that mean? Who is this person? What kind of person has been produced by the party that tells everyone that it favours good housekeeping, that we should know how our money is spent and how it was raised? This is the party that lectures constantly and spends its own money individually and privately, but with profligacy. None of us has the amount of money possessed by the Conservative Party. Yet it has produced this curious person in the Bill.

Mr. Dafydd Wigley: A person lending money obviously includes the Secretary of State, who is provided with powers to lend money to the corporation. It is incredible if the clause means that the Secretary of

State can lend money to the corporation but not inquire whether it is legal or illegal, regular or irregular. I do not know whether any other Bill includes this provision. It begs many questions.

Mr. Flannery: I believe that a detailed explanation is required. An individual investing money in a building society or any of many places where the Conservative Party invests its money privately will want to know precisely whether the money is to be used wisely and whether it will produce a profit. It is fundamental to the Conservative Party that there must be a profit.
If money were invested in a company—the Conservative Party knows more about companies than I know—everything would have to be known about the use of the money. Yet the clause under discussion almost enshrines some kind of criminality within it. It conveys the impression, almost, that we are a race of train robbers or Ronald Biggses, and that no one should inquire into the matter.

Mr. Mikardo: Or embezzlers. What the clause says is that if the chief cashier of the corporation walks into a branch of Barclays Bank—assuming that it is the corporation's bankers—with a small suitcase, plonks it down on the desk and says "I want £20,000 in used £1 notes" the chap behind the window is not allowed to ask why the money is wanted in £1 notes in a suitcase. Under the clause, he is not allowed to ask that question.

Mr. Flannery: My hon. Friend, with the insight that has come into play often throughout the night, sees something that I had not noticed. I understand that the £2 million or £3 million stolen in the Great Train Robbery consisted of used £1 notes. That is probably what stimulated my hon. Friend to intervene. I suggest that it could have been a big suitcase and not a small suitcase. That would imply that whoever received the money intended to invest more money, with no questions asked about where it was destined to go or the use to which it would be put.
Such action causes utter confusion and verges on the criminal, but the person from whom the money is being borrowed at the Secretary of State's behest has no right to raise the matter if he sees the money being put to a use that he thinks disgraceful. He is expected to give carte blanche to the Secretary of State, who can initiate cash limits whenever he feels like it, to use it as he wishes.
I have the impression that the Conservative Party urgently wants to know where its money is going, yet so far no hon. Member has questioned the subsection in question and asked for its removal because it not only verges on the criminal but is in conflict with the party's general philosophy.

Mr. Skinner: My hon. Friend is on a good point, but he has forgotten that while the theory of the Tory Government is to ensure that everything is done correctly, and money is not spent extravagantly, in practice the Secretary of State has recently had to go to the Cabinet, and subsequently come to the House, to get hold of those large suitcases full of money. There was £5 million in one for the steel industry, and he had £1,000 million in another for British Leyland. Then there was ICL, though the money has not been put in the suitcase yet. My hon. Friend's description of the Tories' theory is correct, but in practice, recently the theory has gone awry. Perhaps that is why the clause has been included.

Mr. Flannery: I bow to my hon. Friend's profound knowledge of the Conservative Party's philosophy, though my knowledge of it is reasonably extensive. I worked in education. When money is borrowed for a particular subject, such as education, I am sure that all hon. Members—including you, Mr. Speaker—will want to know how it is used. For example, in education we should want to know whether it was being used to build new schools or employ more teachers. In fact, the Conservatives would not borrow a great deal for education, because it is steadily contracting in their hands.

Mr. Anderson: Would not it be—

Mr. Speaker: Order. There have been many interruptions. It seems to me that it is impossible for anyone to make a speech this morning without steady interruptions, and we all know what that really means.

Mr. James Lamond: On a point of order, Mr. Speaker. I feel inhibited. I intervened in a speech of my hon. Friend the Member for Keighley (Mr. Cryer) on what I thought was a genuine point and he had no hesitation in giving way to my intervention. You have twice used the word "interruption". I would wish not to interrupt—that sounds rude—but, rather, to intervene. Is there a difference between an interruption and an intervention?

Mr. Speaker: No. Mr. Flannery.

Mr. Anderson: rose—

Mr. Flannery: I give way to my hon. Friend, who I think has a pungent point to make.

Mr. Anderson: I hope that when you listen to what I have to say, Mr. Speaker, you will understand that it is a serious point, relating to the interpretation of subsection (7), which appears simply to give protection to a private individual who lends money to the corporation. It gives him that protection, possibly, against the public interest, over the public purse. Therefore, it is protection of a private interest as against a public interest.

Mr. Flannery: I thank my hon. Friend for that explanation, but there could be other explanations. The Government could be saying something like this. "It is more than likely that the money which you are lending to us will be abused. We shall use it in ways to which you will object. But we do not want you to object. The clause will become law and we do not want any complaints from you about the way your money is being used. When the money was borrowed from you originally at certain rates of interest, you might have thought that we would use the money in a way which was acceptable to you and gave you a reasonable rate of interest, but we want no interference from you because we want to use the money in ways which may not be acceptable to you." So when the Minister tells us why the Government wish to retain the clause, I hope that he will give us a detailed explanation.
Most people outside the House do not read Bills. Moreover, any ordinary, normal person outside who reads the clause, and particularly the subsection, will not have the faintest idea what it means. It therefore requires a detailed explanation from the Minister.

Mr. Lamond: Before I take up one or two of the matters raised by my hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery), I warmly

congratulate my hon. Friend the Member for Keighley (Mr. Cryer) on his excellent, well-constructed and logical speech.
There were a number of interventions in my hon. Friend's speech, and I plead guilty in that connection. I intervened because of the stimulating manner in which my hon. Friend spoke. He is a gifted orator and therefore encourages other hon. Members, in their excitement at the new vistas that he opens to them, to intervene—and, perhaps, interrupt, if that is a somewhat more rude form of intervention.
My hon. Friend the Member for Hillsborough said that when he read the Bill his attention was riveted on clause 23. Little wonder, because it is an important clause and has grave implications, on three counts. First, it has serious implications for the future of the whole telecommunications industry. There is no doubt that if the Minister has the power to impose cash limits, those cash limits will be at a lower level than the industry would wish. Secondly—and this matter was touched on by my hon. Friend the Member for Keighley—cash limits have an important effect on the morale of the thousands who work in the industry. They see the industry, of which they are so proud and in which they have invested so much of their lives, being starved of the capital investment that is necessary to enable them to provide the service that they would be proud to provide if the opportunity were available. Of course, if the capital investment programme is severely curtailed, services provided for the community cannot be as good as they would otherwise be. The public complain and the complaints find their way back to employees in the industry and further affect their morale.
9 am
Much of the ill-informed criticism of the Post Office is made by Conservative Members, who are always eager to make snide remarks and criticisms of nationalised industries and yet are prepared to pass legislation that will deny the Post Office and the communications industry generally the opportunity to provide and improve the services about which those Members are so fond of complaining.
Many working people do not receive many letters. Most are official letters, perhaps from their Member of Parliament or the Inland Revenue, and they would not be too sorry if some letters were delayed. But, due to the unemployment that is rife throughout the country, many people receive Giro benefit cheques through the post. They are of the utmost importance to the recipients. I receive many complaints from unemployed constituents and those on supplementary benefit when their Giro cheques are late. That leaves them in difficult financial circumstances and they often telephone me at home at the weekend to complain.
I do not blame the Post Office. Far from it. I blame the inadequacy of the Post Office's investment programme in the past. I do not wish to see that continued, and I believe that it would be if we agreed to clause 23.
My hon. Friend the Member for Wood Green (Mr. Race) has had to leave the Chamber, no doubt for much-needed refreshment.

Mr. Skinner: He is on a Committee.

Mr. Lamond: It is a tribute to the energy of my hon. Friend the Member for Wood Green that he should be ready to serve on a Committee that will be meeting soon.


He mentioned cash limits, which are relevant to the clause and of great interest to me. I have been a member of the Public Accounts Committee for eight years. Hon. Members who have served on that Committee are well aware of the work that it does. We had deep discussions about cash limits when, I regret, they were introduced by the Labour Government.
At that time the able Chairman of the Committee was the right hon. Member for Taunton (Mr. du Cann). All four Chairmen of that Committee were able. It would be difficult to say who was the most able, but the right hon. Gentleman stands high in my regard. My hon. Friend the Member for Bolsover (Mr. Skinner) shakes his head, but at the risk of incurring his anger I persist in my high estimation of the right hon. Member because he shared with me a deep suspicion of cash limits. I remember questioning witnesses about the impact of cash limits.

Mr. Skinner: I shook my head for the simple reason that the right hon. Member for Taunton (Mr. du Cann) believes in cash limits, but when he was involved with Keyser Ullmann he got the cash limits wrong and he had to go the Government to bail the firm out. He did not bother about cash limits then.

Mr. Speaker: Order. The discussion has moved away from the amendment. The right hon. Member for Taunton (Mr. du Cann) has been paid his proper tribute and the House should continue discussing the amendment.

Mr. Lamond: I do not want to stray from the amendment. I shall not pursue my hon. Friend's argument because I do not want to detract from my tribute.
We began with cash limits on one or two Government Departments. It was immediately obvious that cash limits inhibited the development of Departments. The purpose of the experiment was to place on Departments inadequate cash limits. We were assured that the limits were targets. However, by questioning witnesses I discovered that only two parts of two Departments had ever exceeded the cash limits. The spending by most Departments was well below the cash limits placed upon them by the Government.
My hon. Friend the Member for Keighley correctly said that savings made on cash limits were equal to some of the big expenditure cuts which caused alarm and uproar in the country. Yet, stealthily, by use of cash limits, reductions in public expenditure were achieved. Sometimes the amount of cuts achieved was far greater than that publicly announced at the Dispatch Box. The relevance of all this is that today we are being asked to agree under clause 23 to further cash limits being imposed on this new organisation which is being set up. I for one am very much against it because I have seen the bad effects of cash limits not only within the Public Accounts Committee but elsewhere.
My hon. Friend the Member for Wood Green, with his very wide knowledge of the Health Service, touched on a matter in which I too am extremely interested and of which I may say, without wishing to boast, that I have had not a little experience. Before I came to the House of Commons I worked for 16 years as a design engineer employed by the North-East Scotland regional hospital board in the capital works department. Part of my duties at that time, apart from the occasions when I was serving the local council as Provost of Aberdeen—in which capacity I had occasion to entertain some of the hon.

Gentlemen on the Government Benches who are now interrupting me—were concerned with new capital works for the Health Service.
At that time we had the system which my hon. Friend the Member for Wood Green went into in some detail, whereby we were allocated a certain amount of money for capital works and if that money was not spent by 31 March the regional board lost it. That was the worst possible restriction that could be placed on us from the point of view of forward planning. A date that has always been burnt into my memory is 31 March; it was the most crucial date in the entire calendar. Each year on 31 March I would get into my car and take cheques to contractors and make sure that they banked them, because if they did not the cheques could not be cashed later.
I give this example to show the situation that could arise in the Post Office and in telecommunications. People used to come to us—perhaps the secretary of the board—and say "Can you spend £35,000 by the end of the week? What can you buy?" It did not matter whether it was high on the priority list or was needed for the good of the Health Service; the only thing that mattered was that that item of capital equipment could be bought and paid for within a matter of a few days. That was some time ago, but it happened every year and, being a little farsighted and keen to assist in the work of the Health Service, my custom was to prepare a number of schemes which I thought should have high priority ready to be brought out at a momen's notice so that the money could be spent. We did not know whether we would get a penny. My employers were not concerned to encourage me to do additional work that might never come to fruition. My interest in the Health Service was such that I was prepared to do it. On many occasions I phoned various places in England and Scotland to ask whether they had stand-by generators, X-ray equipment and hospital laundry equipment ready to be loaded on a lorry and to be placed in position in Aberdeen or wherever it was to be placed on the day in question. The requirement was that it had to be in position. It was not enough for it to be on the way. The cheque would be given to me and I would take it to the agent so that he had it in his hand.
9.15 am
Can anyone imagine such a chaotic system being run by a Government? We are introducing that system once again into a most modern industry, which needs great capital expenditure. The same type of nonsensical financial control that I and others struggled with many years ago is being built into the Bill.
Lam only a common design engineer. I cannot give forth the financial jargon with which some of my hon. Friends and Conservative Members are familiar. However, I can recite the plain facts of my experience in life, an experience of 16 long years in the Health Service.

Mr. Skinner: I think that. I have the phrase for which my hon. Friend is searching. He says that he does not know the financial jargon, and my hon. Friend the Member for Keighley (Mr. Cryer) did not know it either. It is "counter-cyclical". I got it off Roy Jenkins.

Mr. Lamond: If that is an English word, I shall not be afraid to use it. We pick up these words from time to time. When we listen to Budget debates we soon learn about the J-curve, the crawling peg, fiscal drag and many other things. These terms come into fashion and go out of


fashion. I have listened to many well-educated economists speaking from the Dispatch Box and presenting Budgets. I have listened in awe and admiration of their expertise. However, I might better have said "We should do the very opposite". Every financial policy that has been proposed from the Dispatch Box while I have been in this place has ended in disaster. To have done the opposite could have resulted in nothing very much worse.
I shall direct most of my attention to clause 23. Clause 71 is very similar, but it is applicable only to the Post Office. The clause must have a detrimental effect upon the morale of the workers in the telecommunications industry. They cannot have the pride in their industry which we wish them to have if they are starved of the capital with which to build up the new technology which is so essential and which is so much in demand and which will be essential if and when the upturn in our economic life takes place.
Some hon. Members have mentioned proposals made by various bodies such as the CBI, and by small groups such as the 364 economists who have written a letter of criticism of the Government's policy. There has been criticism from the TUC. Perhaps Conservative Members would like to say "They would say that, would not they?". I will set that aside.
I like to give homely examples in the same way as my hon. Friend the Member for Keighley likes to say something from time to time about the impact of unemployment and the need not to treat people merely as statistics.
There is a gentleman in Oldham by the name of Mr. Fred Broadbent. That is a good Oldham name. He is the chairman of the North West Commercial Hauliers Association. He wrote to the Prime Minister the other day to try to ring home to her as best he could the impact of the Government's policies—as in clause 23, which is part of the Government policies.
I am sorry, I made a mistake about the gentleman's name—the name is Fred Gartside.

Mr. Douglas Hogg: Another good old Oldham name.

Mr. Lamond: Yes, it is another good old Oldham name. I could tell hon. Members of many Gartsides, including Edmund Gartside, who is an extremely important man in the textile industry. As far as I know, Mr. Fred Gartside is no relative. The names of Broadbent and Gartside are both honourable. I would hesitate to say which is the most honourable, but I prefer the ring of Gartside.
This is an important matter, because Mr. Fred Gartside wrote to the Prime Minister. I believe that Mr. Gartside was a Tory supporter previously, because

Mr. Speaker: Order. It is very interesting, but we are dealing with the money for telecommunications and the Post Office. Mr. Gartside must be related to that.

Mr. Lamond: Yes, Mr. Speaker. I admit that that is anecdotal evidence, but it has a relevance which I shall try to draw on in a moment. It is relevant to the Government's economic policy, which gives rise to clause 23.
Many hon. Members have mentioned the Government's policy. I am trying to say that the Government's economic policy is wrong and that clause

23 should therefore not be in the Bill. It is not good enough for me to say that it is wrong, because many people would point a scornful finger and say that I have a long and reasonably good history in the Labour movement, so I would be critical. However, many others are critical, not just the CBI and the 364 economists but ordinary people in business, like that excellent man, Mr. Fred Gartside. He is in business in a reasonably big way, because he is the chairman of the North West Commercial Hauliers Association. He wrote to the Prime Minister because of the recent Budget. It was the last straw for Fred.

Mr. Speaker: Order. The hon. Gentleman is getting near the last straw, because he must not deal with the whole broad spectum of the Government's economic policy. We are discussing not the Budget but clause 23 and amendment No. 70.

Mr. Lamond: I shall do my utmost to comply with your requests, Mr. Speaker. Far be it for me in any way to stray out of order. I would not mean to do so. I apologise if I inadvertently do so. It is easy to stray out of order because one becomes rather angry at the impact of the Government's policy in one's constituency. It is seen everywhere in my constituency. Mr. Gartside was concerned with the textile industry, which has been decimated, and also—

Mr. Speaker: Order. If the hon. Gentleman persists, I shall ask him to resume his seat.

Mr. Lamond: I am sorry, Mr. Speaker, to have incurred that severe rebuke from you. I was only trying to follow up points that have been made in earlier contributions. I know that you are anxious to draw this part of today's business to a close, as there are many other amendments to be discussed.
My objections to clause 23 also relate to clause 71. I shall not stray into that argument, because it would take far too much time.
Clause 23 should be removed from the Bill because it has grave implications for those who work in the industry. Their morale will be sapped by the lack of adequate capital investment. As a result, we shall have unhappy employees who will be unable to contribute as efficiently as they would wish to the well-being of that important developing industry which has a great future.
The question of cash limits is also covered by clause 23. They are severely restricting on the industry. Last, but not least, there is the impact which in the long run this has on the consumer. After all, that is the person to whom, first and foremost, we are trying to supply a service. If clause 23 has these grave implications on the three sides of the question, surely anyone who has the well-being of this great industry at heart will agree with the amendments.

Mr. Flannery: On a point of order, Mr. Speaker. I notice that the Attorney-General is present. Is it possible for him to give an explanation of subsection (7), which no one—

Mr. Speaker: Order. That is not really a point of order. The hon. Gentleman made that point in his speech. The Minister may reply to it, but I do not know.

Mr. Wigley: On a point of order, Mr. Speaker. Can I be assured that you will not accept a closure motion on this debate after the Minister has spoken before we have had an opportunity to discuss the Welsh aspects, which are extremely important?

Mr. Speaker: The House has debated this subject for three hours. I can give no guarantees whatever.

Mr. Kenneth Baker: When the right hon. Member for Salford, West (Mr. Orme) opened the debate about three hours ago he rightly said that these were probing amendments. I strongly advise the House—whatever it may think of what I shall say—not to vote against these two clauses. They are central to the Bill. They contain the main borrowing powers, and it would totally hamstring both BT and the Post Office Corporation should they be defeated. I believe that the right hon. Gentleman indicated as much.

Mr. Orme: I accept what the Minister said. This was the only way in which we could hold this major debate. There are aspects in the clauses which we do not like, but their deletion would affect the borrowing powers. Therefore, I shall be advising my hon. Friends not to vote for the amendments.

Mr. Baker: I am grateful to the right hon. Gentleman. We are really discussing BT's external finance and the part which that can play in the financing of the corporation's investment programme.
9.30 am
Let me set the mind of the hon. member for Sheffield, Hillsborough (Mr. Flannery) at rest about subsection (7). It was indeed a subsection that I added to the Bill in Committee myself. I had as much difficulty in understanding it as did the hon. Gentleman and his hon. Friend the Member for Wood Green (Mr. Race), but I was advised that it was necessary. A similar provision, although not exactly in those terms, is found in other borrowing powers clauses. I was advised that it was necessary, in that the subsection protects the rights of lenders in the event of BT borrowing ultra vires, that is to say, if the borrowing takes BT's indebtedness over the statutory limit, or the money borrowed is used for a purpose other than what is permitted under the clause.
It is based in paragraph 20 of schedule 13 to the Local Government Act 1972.It does not imply that the Post Office is in the habit of borrowing illegally, or that BT is expected to do so. But the prudent borrower would normally require to be satisfied that the borrowing was legal in order to protect his position. The courts would not order BT to repay any sums that it had borrowed ultra vires. This subsection relieves the lender of the need to be so satisfied and thereby also relieves BT of the need to provide the necessary proof.
I appreciate that this is a complicated matter. When I moved the amendment in Committee the right hon. Member for Rutherglen (Mr. MacKenzie), who led for the Opposition, welcomed it, because it was a fairly normal provision.

Mr. Flannery: Do I understand that there is a similar provision in every Bill appertaining to other corporations? The hon. Gentleman read that out word for word from his brief. I suspect that he is no clearer now than I am, and that is why he had recourse to reading it word for word.

Mr. Baker: When I am given carefully phrased words by lawyers I usually stick to them. I find it safer that way. Let me say at the outset that the Government endorse the importance of the investment in telecommunications. The telecommunications network has a key role to play in the introduction of the new information technologies, which

can do so much to improve our industrial efficiency and competitiveness. At present we have a system that contains much equipment that has been outdated by technological advances. We need to modernise the system, for example, by introducing new electronic switching systems that allow the transmission of signals in digital form. We need to expand the system to cater for customer demand, which is still growing, if more slowly, despite the recession. We need to use the system to introduce new services to the customer.
A few figures illustrate what is involved. I take it rather hard that hon. Members opposite criticise the level of investment of the Post Office and British Telecom, because the Labour Government's record was exceedingly disappointing, as those who follow these matters readily recognise. After the high levels of the early 1970s—and the highest level was achieved in the last year o f the previous Conservative Government—investment in the telecommunications system was reduced to a low point of £1·4 billion in 1977–78. That was the time of the post-IMF cuts. It has since climbed to £1·5 billion in 1978–79, £1·6 billion in 1979–80 and an estimated £1·7 billion in 1980–81. A further increase in investment levels is planned for 1981–82.
That is a record of which the Government can be proud, in that since we have been in office we have significantly increased the level of investment in British Telecom. All the figures that I have quoted are at constant 1981–82 outturn prices. They illustrate the magnitude of the programme.
Pushing ahead with this investment programme at a time of economic difficulties is no easy task. A major part of the programme can be financed from the cash flow from British Telecom's large depreciation provisions, but in addition, the corporation needs to make profits, and it needs to borrow. The Government, for their part, have increased British Telecom's external financing limit in the financial year just ended to £223 million. Though less than British Telecom would have liked, this marks a significant increase on recent years, when net repayments by British Telecom have been required.

Mr. Wigley: Will the Minister confirm that the modernisation of the network as British Telecom wished would have required £200 million more than it has had at its disposal to do this essential work?

Mr. Baker: Does the hon. Gentleman mean this year or next?

Mr. Wigley: This year.

Mr. Baker: The year that has just ended, or the year that we are in now?

Mr. Wigley: The year that has just ended.

Mr. Baker: We are discussing these figures at the moment with British Telecom—not only the overhang from last year but the future investment programme for this year. I can neither confirm nor deny that figure, because I regret to say that I do not carry it in my head.
We are likewise concerned to do everything possible to increase the finance available for telecommunications investment in 1981–82 and subsequent years. The best route lies through the introduction of private capital. I must emphasise this. To the extent that BT can raise money in partnership with the private sector, it does not


have to come to me or a Treasury Minister to ask permission. If it can tap the private sector market through venture capital of that sort it does not fall within the PSBR.
I should like to see BT forming joint ventures in partnership with the private sector—for example, in the supply of attachments and the provision of services auxiliary to the main network. Provided that BT did not control such joint ventures, they would be genuinely private sector concerns, whose borrowings would lie outside the PSBR constraint.

Mr. Anderson: In those circumstances, when BT would be able to go on to the open market, and, either through joint venture or otherwise, participate with a private concern, would that private concern enjoy the guarantee of the Government?

Mr. Baker: It would depend upon the partnership and the proportions of the partnership, but if it were a partnership on a 50–50 basis, or anything of that sort, it would not enjoy the guarantee. It would be a separate commercial venture. That is what would allow BT to go to the private sector without coming back to the Government. Hon. Members will know that the Bill was amended in Committee so that BT would have the power, if the Government permitted, to borrow directly in the money market for long-term capital needs. As I said at the time, this is a permissive provision. Whether we can agree to this course involves difficult issues relating to the Government's general economic strategy and to the practicalities of raising finance by new types of financial instruments.
This is under review. The Treasury has to police the number of nationalised industries that would be wanting to go to the market. As I said in Committee, the queue has to be orderly, but at least the gateway exists. We are in discussion with BT and with the Treasury on its capital requirements for this year. We are conscious of the capital requirements of BT. We want to see a good flow of investment into BT and also into the postal side. We are actively reviewing this now, and I think that the debate has been helpful. It has emphasised the needs of BT in this area.

Several Hon. Members: rose—

The Parliamentary Secretary to the Treasury (Mr. Michael Jopling): rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put.

The House divided: Ayes 250, Noes 140.

Division No. 139]
[9.38 am


AYES


Adley, Robert
Benyon, W. (Buckingham)


Aitken, Jonathan
Bevan, David Gilroy


Alexander, Richard
Biffen, Rt Hon John


Alison, Michael
Biggs-Davison, John


Ancram, Michael
Blackburn, John


Arnold, Tom
Bonsor, Sir Nicholas


Aspinwall, Jack
Bottomley, Peter (W'wich W)


Atkins, Robert (Preston N)
Bowden, Andrew


Atkinson, David (B'm'th, E)
Boyson, Dr Rhodes


Baker, Kenneth (St. M'bone)
Braine, Sir Bernard


Baker, Nicholas (N Dorset)
Bright, Graham


Banks, Robert
Brinton, Tim


Beaumont-Dark, Anthony
Brittan, Leon


Bendall, Vivian
Brooke, Hon Peter


Bennett, Sir Frederic (T'bay)
Brotherton, Michael


Benyon, Thomas (A'don)
Brown, Michael (Brigg &amp; Sc'n)





Browne, John (Winchester)
Jessel, Toby


Bruce-Gardyne, John
Jopling, Rt Hon Michael


Buck, Antony
Kaberry, Sir Donald


Budgen, Nick
Kellett-Bowman, Mrs Elaine


Bulmer, Esmond
Kershaw, Anthony


Butcher, John
King, Rt Hon Tom


Carlisle, John (Luton West)
Knight, Mrs Jill


Carlisle, Kenneth (Lincoln)
Knox, David


Chalker, Mrs. Lynda
Lamont, Norman


Channon, Rt. Hon. Paul
Lang, Ian


Chapman, Sydney
Latham, Michael


Churchill, W. S.
Lawson, Rt Hon Nigel


Clark, Hon A. (Plym'th, S'n)
Lee, John


Clark, Sir W. (Croydon S)
Lennox-Boyd, Hon Mark


Cockeram, Eric
Lester, Jim (Beeston)


Corrie, John
Lewis, Kenneth (Rutland)


Costain, Sir Albert
Lloyd, Peter (Fareham)


Cranborne, Viscount
Loveridge, John


Critchley, Julian
Luce, Richard


Crouch, David
Lyell, Nicholas


Dean, Paul (North Somerset)
McCrindle, Robert


Dorrell, Stephen
MacGregor, John


Douglas-Hamilton, Lord J.
MacKay, John (Argyll)


Dover, Denshore
Macmillan, Rt Hon M.


du Cann, Rt Hon Edward
McNair-Wilson, M. (N'bury)


Dunn, Robert (Dartford)
McNair-Wilson, P. (New F'st)


Durant, Tony
McQuarrie, Albert


Dykes, Hugh
Madel, David


Eden, Rt Hon Sir John
Major, John


Eggar, Tim
Marland, Paul


Fairbairn, Nicholas
Marshall, Michael (Arundel)


Faith, Mrs Sheila
Mates, Michael


Farr, John
Mather, Carol


Fell, Anthony
Maude, Rt Hon Sir Angus


Fenner, Mrs Peggy
Mawhinney, Dr Brian


Finsberg, Geoffrey
Maxwell-Hyslop, Robin


Fisher, Sir Nigel
Mayhew, Patrick


Fletcher, A. (Ed'nb'gh N)
Meyer, Sir Anthony


Fletcher-Cooke, Sir Charles
Miller, Hal (B'grove)


Fookes, Miss Janet
Mills, Iain (Meriden)


Fowler, Rt Hon Norman
Mills, Peter (West Devon)


Fox, Marcus
Moate, Roger


Fraser, Peter (South Angus)
Monro, Hector


Fry, Peter
Montgomery, Fergus


Gardiner, George (Reigate)
Moore, John


Gardner, Edward (S Fylde)
Morgan, Geraint


Garel-Jones, Tristan
Morris, M. (N'hampton S)


Gilmour, Rt Hon Sir Ian
Morrison, Hon C. (Devizes)


Glyn, Dr Alan
Morrison, Hon P. (Chester)


Goodlad, Alastair
Mudd, David


Gorst, John
Murphy, Christopher


Gow, Ian
Neale, Gerrard


Gower, Sir Raymond
Needham, Richard


Grant, Anthony (Harrow C)
Nelson, Anthony


Greenway, Harry
Neubert, Michael


Griffiths, E.(B'y St. Edm'ds)
Newton, Tony


Griffiths, Peter Portsm'th N)
Onslow, Cranley


Grist, Ian
Oppenheim, Rt Hon Mrs S.


Grylls, Michael
Osborn, John


Gummer, John Selwyn
Page, Richard (SW Herts)


Hamilton, Hon A.
Parris, Matthew


Hamilton, Michael (Salisbury)
Patten, Christopher (Bath)


Hampson, Dr Keith
Pawsey, James


Hannam, John
Percival, Sir Ian


Haselhurst, Alan
Pink, R. Bonner


Havers, Rt Hon Sir Michael
Pollock, Alexander


Hawkins, Paul
Porter, Barry


Hawksley, Warren
Price, Sir David (Eastleigh)


Heddle, John
Proctor, K. Harvey


Henderson, Barry
Pym, Rt Hon Francis


Heseltine, Rt Hon Michael
Raison, Timothy


Hicks, Robert
Rathbone, Tim


Hill, James
Rees-Davies, W. R.


Hogg, Hon Douglas (Gr'th'm)
Renton, Tim


Hooson, Tom
Rhodes James, Robert


Howe, Rt Hon Sir Geoffrey
Rhys Williams, Sir Brandon


Howell, Rt Hon D. (G'ldf'd)
Ridley, Hon Nicholas


Howell, Ralph (N Norfolk)
Rifkind, Malcolm


Hunt, David (Wirral)
Roberts, Wyn (Conway)


Jenkin, Rt Hon Patrick
Rost, Peter






Sainsbury, Hon Timothy
Townend, John (Bridlington)


Scott, Nicholas
Townsend, Cyril D, (B'heath)


Shaw, Giles (Pudsey)
Trippier, David


Shelton, William (Streatham)
Trotter, Neville


Shepherd, Colin (Hereford)
van Straubenzee, W. R.


Shepherd, Richard
Vaughan, Dr Gerard


Shersby, Michael
Viggers, Peter


Silvester, Fred
Waddington, David


Sims, Roger
Wakeham, John


Skeet, T. H. H.
Waldegrave, Hon William


Smith, Dudley
Walker, B. (Perth)


Speed, Keith
Waller, Gary


Speller, Tony
Ward, John


Spicer, Jim (West Dorset)
Watson, John


Spicer, Michael (S Worcs)
Wells, John (Maidstone)


Sproat, Iain
Wells, Bowen


Squire, Robin
Wheeler, John


Stanley, John
Whitelaw, Rt Hon William


Steen, Anthony
Whitney, Raymond


Stevens, Martin
Wickenden, Keith


Stewart, Ian (Hitchin)
Wiggin, Jerry


Stewart, A.(E Renfrewshire)
Wilkinson, John


Stokes, John
Williams, D.(Montgomery)


Stradling Thomas, J.
Winterton, Nicholas


Taylor, Teddy (S'end E)
Wolfson, Mark


Tebbit, Norman
Young, Sir George (Acton)


Temple-Morris, Peter
Younger, Rt Hon George


Thatcher, Rt Hon Mrs M.



Thomas, Rt Hon Peter
Tellers for the Ayes:


Thompson, Donald
Mr. Spencer Le Marchant and Mr. John Cope


Thornton, Malcolm





NOES


Adams, Allen
Fletcher, Ted (Darlington)


Alton, David
Forrester, John


Anderson, Donald
Fraser, J. (Lamb'th, N'w'd)


Archer, Rt Hon Peter
Freud, Clement


Ashton, Joe
Garrett, John (Norwich S)


Atkinson, N. (H'gey,)
George, Bruce


Barnett, Guy (Greenwich)
Gilbert, Rt Hon Dr John


Beith, A. J.
Graham, Ted


Benn, Rt Hon A. Wedgwood
Grant, George (Morpeth)


Bennett, Andrew (St'kp't N)
Hardy, Peter


Booth, Rt Hon Albert
Harrison, Rt Hon Walter


Brocklebank-Fowler, C.
Hart, Rt Hon Dame Judith


Brown, R. C. (N'castle W)
Haynes, Frank


Brown, Ron (E'burgh, Leith)
Hogg, N. (E Dunb't'nshire)


Brown, Ronald W. (H'ckn'y S)
Holland, S. (L'b'th, Vauxh'll)


Callaghan, Jim (Midd't'n &amp; P)
Home Robertson, John


Campbell, Ian
Huckfield, Les


Campbell-Savours, Dale
Hughes, Robert (Aberdeen N)


Cant, R. B.
Janner, Hon Greville


Carmichael, Neil
Jones, Barry (East Flint)


Cocks, Rt Hon M. (B'stol S)
Jones, Dan (Burnley)


Coleman, Donald
Kaufman, Rt Hon Gerald


Cook, Robin F.
Kilroy-Silk, Robert


Cowans, Harry
Kinnock, Neil


Cryer, Bob
Lamond, James


Cunliffe, Lawrence
Lead bitter, Ted


Cunningham, G. (Islington S)
Leighton, Ronald


Dalyell, Tam
Lewis, Ron (Carlisle)


Davies, Rt Hon Denzil (L'lli)
Litherland, Robert


Deakins, Eric
Lofthouse, Geoffrey


Dean, Joseph (Leeds West)
McCartney, Hugh


Dempsey, James
McElhone, Frank


Dewar, Donald
McGuire, Michael (Ince)


Dixon, Donald
McKay, Allen (Penistone)


Dobson, Frank
McKelvey, William


Dormand, Jack
MacKenzie, Rt Hon Gregor


Douglas, Dick
McNally, Thomas


Duffy, A. E. P.
McNamara, Kevin


Dunwoody, Hon Mrs G.
McTaggart, Robert


Eadie, Alex
McWilliam, John


Eastham, Ken
Magee, Bryan


Ellis, R. (NE D'bysh're)
Marshall, Dr Edmund (Goole)


Ellis, Tom (Wrexham)
Martin, M (G'gow S'burn)


English, Michael
Maxton, John


Evans, Ioan (Aberdare)
Mikardo, Ian


Evans, John (Newton)
Millan, Rt Hon Bruce


Flannery, Martin
Mitchell, Austin (Grimsby)





Morris, Rt Hon C. (O'shaw)
Stoddart, David


Moyle, Rt Hon Roland
Stott, Roger


O'Halloran, Michael
Strang, Gavin


O'Neill, Martin
Summerskill, Hon Dr Shirley


Orme, Rt Hon Stanley
Taylor, Mrs Ann (Bolton W)


Pendry, Tom
Thorne, Stan (Preston South)


Penhaligon, David
Tilley, John


Powell, Raymond (Ogmore)
Tinn, James


Price, C. (Lewisham W)
Urwin, Rt Hon Tom


Richardson, Jo
Varley, Rt Hon Eric G.


Roberts, Albert (Normanton)
Wainwright, E. (Dearne V)


Robinson, G. (Coventry NW)
Watkins, David


Rooker, J. W.
Welsh, Michael


Roper, John
White, Frank R.


Ross, Ernest (Dundee West)
White, J. (G'gow Pollok)


Rowlands, Ted
Wigley, Dafydd


Sheerman, Barry
Williams, Rt Hon A. (S'sea W)


Sheldon, Rt Hon R.
Wilson, William (C'try SE)


Silkin, Rt Hon J. (Deptford)
Winnick, David


Skinner, Dennis
Woodall, Alec


Soley, Clive
Young, David (Bolton E)


Spearing, Nigel



Spriggs, Leslie
Tellers for the Noes:


Steel, Rt Hon David
Mr. James Hamilton and Mr. George Morton.


Stewart, Rt Hon D. (W Isles)

Question accordingly agreed to.

Question, That the amendment be made, put accordingly and negatived.

Clause 30

POWER OF THE SECRETARY OF STATE TO MAKE ORDERS ABOUT PENSIONS

Mr. Charles R. Morris: I beg to move Amendment No. 52, in page 29, line 40, leave out clause 30.
It is a matter of some regret that we should be embarking on a major issue in the Bill, which deals with the pension rights of 400,000 postal and telecommunications workers, after 18 hours, deliberation on the Bill. It has been a hard day's night of debates.
One speech of great frankness and honesty to which I listened during the long night was that made by the hon. Member for Canterbury (Mr. Crouch). The House will recall that he related his experiences of meeting a number of telecommunications workers in the lobby held in Westminster yesterday. He correctly and honestly described them as responsible public employees of the Post Office. He said that they had understandable anxieties about a number of important issues in the Bill. He did not identify the anxieties, but I suggest that one of them is the proposal in clause 30 to separate the Post Office superannuation fund. That one proposal has generated more concern and anxiety than any other proposal in the Bill. Why should there be that anxiety? I invite every hon. Member to consider the terms of clause 30.
Never have I read a clause couched in such arrogant and—dare I suggest?—cavalier terms. Clause 30 gives the Secretary of State power to separate the Post Office superannuation fund. It overlooks the fact that the Secretary of State's is not the primary financial interest in the Post Office superannuation fund. There are also the interests of the individual members of the fund, the management of the Post Office and the trustees.
The question which has never been answered is: how is that power to be implemented? How does one separate the largest superannuation fund in this country with assets of 3 billion? It has investments in 1,470 companies throughout the world. It has £40 million invested in the


Magasin du Louvre shopping centre in Paris. It has £26 million invested in the Milton Keynes town centre. How can one separate those investments? How can one separate investments on that scale and ensure equity in the interests of Post Office workers? I hope that hon. Members will clearly consider those issues before arriving at a decision.
In moving the amendment I seek merely to focus attention on the problems of separating the fund. It is not only the problem of separating the assets and investments on a fair and equitable basis. The Post Office superannuation fund has a large measure of indebtedness arising from an error made in the Post Office Act 1969. The error was in establishing the fund. No fund existed previously, so the Government proceeded on the assumption that there should be a notional pension fund, the assets of which would be invested in 2½ per cent. consols. The consols may have been reasonable in 1969 but inflation and the rising cost of living make nonsense of them.
By the time that I drew attention to the increasing indebtedness of the fund in 1975 the deficit was £729 million It reached £1,250 million before the Government decided that they had to take action. They decided to pay money back into the fund to make up for the deficit, but it will not be cleared until 1986. Not only have the fund's assets and investments to be split, but someone will have to decide what will happen to the indebtedness.
I have a document circulated by the two distinguished chairmen of the Post Office corporation and British Telecom to every member of the Post Office staff. The letter is disingenuous. It is illuminating not for what it says but for what it leaves out. It does not say that the trustees of the fund are against splitting it—and they have no interest to serve other than the best interests of the members and subscribers to the fund. The letter does not say that splitting the fund will result in additional expenditure of £1 million for administration. Neither point is referred to.
The letter states:
Most unions have said they would prefer to retain one scheme for both corporations.
Most unions! About 90 per cent. of the unions representing Post Office staff oppose separation on the basis proposed.
10 am
The letter goes on:
The procedures required for Inland Revenue approval of a scheme, which is essential for the preferential tax treatment which you presently enjoy as a member of an approved scheme, would prevent cross-subsidising between two separate employers.
The chairmen make that point but fail to indicate what the Inland Revenue preferential treatment means in terms of money. Does it mean more than the additional £1 million in administrative costs that would be involved in the separation of the superannuation fund? That sort of information is not given in the letter. I believe that Post Office staff are entitled to the information.
Post Office staff generally work a lifetime for a very modest pension in their declining years. A large percentage would not have stayed or been attracted to service in the Post Office and telecommunications had there not existed the attractions of the pension scheme. It is not on for the Secretary of State to come along with clause 30 stating that he alone will decide and will have

the power to apportion in order to separate the Post Office superannuation scheme. Assurances to the effect that the level of benefits will remain the same are nothing when one calls into question the issue of pensions, with which the whole financial future of the families of Post Office workers is involved.
I should like to read to the House some of the comments of the trustees of the superannuation fund on the question of separation. The trustees say that the most persuasive argument reveled by their analysis is that
A pension fund is set up as an entity independent of the employer. There is no fundamental reason why it should follow the employer or divide if the employer divides, provided that the employers' views can be adequately conveyed.
It is the view of the trustees that there is no reason why there should be a division between posts and telecommunications. To those who question the argument I would point out that British European Airways and British Overseas Airways were two separate businesses but continued to have a single and unified superannuation fund for many years. The trustees say that they believe that the fund has been well organised and managed. I must pay tribute to the chairman and directors of the trustees and to the trustees themselves for the efficent manner in which they have managed the fund.
The view that the fund has been well organised and managed is also held by members of the fund and their trade union representatives. The trustees go into some detail in explaining why it would be a disadvantage for the biggest pension fund in England to be split into the third and fourth largest funds. They say:
One advantage they will lose is that they will no longer be the automatic first port of call for anyone with a large proposition, be it in property, the placing of new shares, or a sale for distress reasons of a large line of existing shares. Not only does this give us the advantage of first refusal, it also gives us the chance in any deal involving other partners of negotiating terms which are weighted towards us.
The trustees add that there are therefore very good practical reasons for being the biggest fund. One of the reasons is that the staff themselves like to belong to the biggest and best fund or organisation of pensions that may be in existence. They point out that
Another consequence of size is that it reduces risk. Size permits increased diversification.
That is my view on the splitting of the Post Office superannuation fund. The hon. Member for Canterbury said that the matter had been raised with him by the deputation of postal and telecommunications workers. He acknowledged that those workers were concerned. That anxiety is shared by 400,000 postal and telecommunications workers.
I hope that the matter will not be decided by the usual ministerial vote, the pay roll brought in to vote down the proposition. On second thoughts, I hope that there will be no vote. I hope that the Minister will undertake to look at the issue, because it involves the future lives of the workers and their families. It is crucial to their future family security. It is not a minor political issue, but one that is central to their very existence.

Mr. Crouch: I had a representation from my constituents about the Bill and, in particular, about the pension provisions but I must point out to the right hon. Gentleman that I told them, on the best advice that I had received, that no pensioner, either in the Post Office or in the new corporation, would be disadvantaged in any way by having separate schemes. That was on the best advice that I had received.

Mr. Morris: I thank the hon. Member for what he said. I hope that he will take account of what I have said in my speech, because I have listened to the same argument that no one will be disadvantaged, that there will be £1 million more in administrative costs, and that not only the assets and the investments have to be separated, but the indebtedness. I heard one estimate that it will take between five and seven years to separate the funds.
What other argument has been advanced to justify the separation? We are told that it is a natural extension of the philosophy of separation. What does that mean? It means that the superannuation fund will have to be separated for administratively tidy reasons, if the two businesses are separated. The justification for separating the superannuation fund is merely that the two businesses are being separated. Facile justifications of that nature are simply not on.
Perhaps no one will be disadvantaged, but that fact has still to be proved. One can guess or estimate, but in the final analysis there has to be proof, and that cannot be furnished today.

Mr. Ioan Evans: One would need the wisdom of Solomon to separate the investments in such a way that one fund was not greater than the other. Surely, before asking us to pass a measure which implies that the superannuation funds are to be separated there is a moral obligation on the Government to have discussions with those concerned and with the two bodies that are to be separated to ensure that the scheme that will eventually emerge is beneficial to all parties. In fact, we are being asked to give the Secretary of State a blank cheque, and he will be able to decide in the way that he thinks best how to separate the two parts.

Mr. Morris: I agree with my hon. Friend. He mentioned discussion, and there has been discussion. The Minister was quick to invite the leaders of trade unions to discuss pension funds with him in his office. He responded quickly to the concern expressed by trade unionists.
The trusteees and unions are against separation, I understand that Ministers are not too happy about it either. The only people who are convinced about the separation are the managements and chairmen of the boards. What are their interests in the superannuation funds? They are probably not even members. They are probably covered by Inland Revenue memorandum No.12 provisions, which are infinitely more generous than any pension that will come from the superannuation scheme. The issue is of crucial importance. I hope that the House does not treat it lightly.

Mr. Michael Shersby: I listened with care to the right hon. Member for Manchester, Openshaw (Mr. Morris). I intervene briefly to register the anxiety of my constituents. They talked to me about it yesterday and previously in my constituency. I shall not speak for long because soon I must attend the Committee on the British Nationality Bill.
I hope that my hon. Friend will provide a careful and full explanation of the way in which this important matter is to be handled. Hon. Members who are listening to the debate would then understand exactly what is proposed and constituents would be satisfied that their interests are fully protected and that they will not be disadvantaged by the proposed changes. The matter is important because it affects the lives and futures of workers and their families. Hon. Members recognise that.
We have been discussing the Bill for many hours. That so many hon. Members are present illustrates that we share a concern and are anxious to ensure that the future of employees is fully protected. I hope that my hon. Friend will go to some length to place on record the arrangements and that he will satisfy us that they are more than adequate to ensure justice for every member of the pension fund.

Mr. Golding: Many Conservative Members share the views of the hon. Member for Uxbridge (Mr. Shersby). The Government could give an assurance without loss of face.
I was disappointed that management tried to bounce Ministers into taking a decision. The brief which managers in the local telephone areas sent to hon. Members is inadequate and disappointing. I hope that the Minister goes a long way to meet the arguments of the staff.
The trustees found
that there were no arguments concerning the provision of benefits or the avoidance of subsidies which would indicate that any option is superior to another.
They recognised that the level of benefit is in doubt but that one fund
has advantages in regard to management risk, costs, the consequences of size and the timing of change; and, provisionally, with regard to security.
They are important aspects. If the staff have been told by the trustees that for the moment their pensions are more secure in one fund, it will lead to insecurity, especially if Ministers take the decision to change the fund. I have not changed my opinion since the Committee stage, although it varies slightly from that held by my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris).
10.15 am
My position is that of Mr. Brian Stanley and the other general secretaries who wrote to the Minister and who echoed the conclusions of the trustees.
What the trustees have said is that all the advantage at the moment is in staying as one fund, but that may not always be so. Over a period of years the situation could change, and the general secretaries have proposed to the Minister that we keep one fund at present but have a specific point in time, between three and five years ahead, at which the question will be reviewed and a decision taken. That would be a very much more reasonable way of proceeding.
As I have said to Ministers before, this whole change is producing a great deal of insecurity among the staff. It must be remembered that many of our members are ex-civil servants, they were that before the 1969 Act, and for many civil servants the pension is one of the most important symbols of security of tenure that they have. We appear to threaten that and we are going to add to the insecurity in a way that is totally unacceptable, because there seems to me to be no great reason for doing it.
I therefore beg the Minister on this question to leave it on the basis that is requested. Let us have a specific time, three to five years ahead, and look at it then and take a decision, but until then we should leave well alone.

Mr. Mikardo: My right hon. and hon. Friends have talked about the merits and demerits of the proposal to separate the pension fund into two funds and they have both rested part of their argument on what has been said by the trustees of the fund, who, after all, ought to be in a better position than anyone else to know what is to the benefit or otherwise of the fund. Two hon. Gentlemen


have told us at various stages that their constituents who are members of the fund are concerned about the possible implication of the division.
I do not know anything about the fund. Therefore, I am not capable of making a judgment as to whether it would be beneficial or damaging to split the fund. I am bound to say that I am influenced by the views of the trustees, but I make no judgment of my own, because I am not competent to do so.
I rise on a different point. Irrespective of what changes the Minister proposes to make, irrespective of what orders he proposes to issue, and when, and irrespective of their merits and demerits, my question to the Minister is "What the heck has it got to do with you, anyway? Whose money is it? What gives you the right to make regulations about the disposition of other people's money?" This is not public money. This is not State money. The owners of the property, so to speak, are the members of the fund. It is their money and it is they and only they who are entitled to decide what to do with it.
It is true that they cannot, because there are 400,000 of them, have a sort of Greek city-state mass meeting to make every decision on what needs to be done, and so they have some chaps called trustees whom they appoint, as the name applies, because they trust them. The trustees decide to invest a lump of the fund in this piece of property and another lump in that group of shares, and so on, and they are authorised to do so by the people who own the money. The trustees themselves are members, so they own some of the money, and they are authorised by the other people who own the money to decide what ought to be done with it. If there are amendments to the rules of a pension fund, the amendments can be made and agreed only by the members of the fund. I know that from time to time amendments are made to cover different regulations for different classes of personnel and that the amendments are agreed by the members.
In the clause the Secretary of State is arrogating unto himself the power to decide what shall be done with someone else's money to which he has contributed nothing. He does not even have to consult the trustees or the members. He does not have to take a ha'p'orth of notice of what the owners of the money want to have done with their money. These are dictatorial powers.
I know the Minister for Industry and Information Technology very well. I know that he is about as undictatorial a chap as one would find in a very long seven-day march. Furthermore, as my old friend Damon Runyon would have said, he is by no means stupid. Therefore, I am sure that he realises the necessity of engaging in some consultation. I am sure that he would want to do so.
I am never satisfied when a Minister says "I know that I have been given powers that are unlimited by any obligation to consult, but I shall always consult. Indeed, I have already consulted." I have reason to believe that the Minister has had some conversations. We had this argument in Committee and I have had the same argument with Labour Ministers. I contend that those who are members of pension funds have a right to be consulted.
The consultation should not be a piece of condescension on the part of the Secretary or the Minister. He should be glad that they are prepared to talk to him about their money. The hon. Gentleman might say—Labour

Ministers used to do this and I used to get equally angry with them—"Do not worry, honourable Friends. Of course I will do this, that and the other. Of course I will consult." That would be a recognition of the need to consult. If the need were recognised, it would be idiotic not to consult. Why does not the hon. Gentleman recognise that it would give reassurance to the constituents of Conservative Members who have spoken in the debate and to my constituents who have expressed their concern if their right to be consulted were written into the statute?
When I read the clause with care I considered that despite all its defects we should not vote against it. I think that that is the feeling of my hon. Friends. My hon. Friends know a great deal more about it than I do and I am willing to defer to them. However, on second thoughts I wondered whether I should vote against it not to get rid of it but to create a situation, if enough hon. Members shared my view, in which the hon. Gentleman would have to write it afresh, including the obligation to consult.
I hope that the least that we shall get today—and I fancy that we shall get it—is an account from the Minister on what talks he has had with whom and what talks he proposes to have with whom. If he is proposing not to take the advice of the trustees, on what grounds does he feel justified to defy that advice? That is the least that we should get from him.
Further, the Minister should give an undertaking to have a fresh think about that matter, with the object that at a later stage in the progress of the Bill, although it will have to be in the other place, he might include some provisions in clause 30 to reassure our constituents who are members of the fund.
Under those provisions, his consultations with representatives of the members should not be an act of Jove-like condescension on his part—the god descending from Olympus to consort for a few fleeting moments with the mortals milling round the base of the mountain. It should be not just a condescension on his part but the acceptance of an obligation that he should not be mucking about with other people's money without going to some trouble to find out what those other people want done with their money.
I hope that the Minister will see that as a reasonable case and that he will give a little more thought to it.

Mr. Crouch: I shall not take up much of the time of the House. I hope that on this occasion my short intervention will not provoke a considerable debate, because it would be an injustice and it would be unfair to the right hon. Member for Manchester, Openshaw (Mr. Morris) and the hon. Member for Newcastle-under-Lyme (Mr. Golding), who spoke cogently and with great sincerity. To their words I add the words of the hon. Member for Bethnal Green and Bow (Mr. Mikardo), because he did not exaggerate the argument. Neither do I.
The constituents who saw me yesterday afternoon were concerned about a number of aspects in the Bill. Above all, they were concerned about their investment in their pensions and the corporation's investment in their pensions. They asked me to do something about it. I said that we would debate it at some stage, as we were debating the Bill through the night. That is a matter that I cannot neglect, even at this late hour when we are all tired. My constituents asked me to refer to it. They said that I might be a Tory but I could at least say that they were worried.
If the debate were to end now, without a response from the Minister, I am sure that the case would have been regarded as proven. It is proven that there is more justice in keeping a central fund for two corporations, at least for a while, until it can be seen to the satisfaction of all—perhaps in two or three years' time—that separation can be made. Perhaps separation is right in equity, in terms of the running of pension funds and insurance schemes. I am no expert in those matters. Perhaps there is a sound argument, advanced in insurance and trustee pension fund circles, that there should be a separate fund for a separate corporation and that money should be not be paid out to a pensioner working in one corporation from a fund that has been contributed to by members of another corporation.
There may be an argument for that, but it is not a strong argument. It may take a little time to understand and to be explained. It may take a year, or two years. Then perhaps the change can be made to the satisfaction of both Parliament and the pensioners.
I look forward with interest to the Minister's response. I hope that it will come now, because enough concern has already been shown. We want to know what the Minister has to say in response to these arguments.

Mr. Cryer: We are coming to the nitty-gritty of the Government's plans for separating and hiving off the telecommunications and postal sides of the Post Office. Hon. Members on both sides of the House have expressed great concern that pensions should not be prejudiced by that procedure.
Earlier in the night the Minister confidently said that the Government's plans would secure more jobs and give more confidence to the industry. It is plain that the reverse is the position. People are worried. I was interested to hear the hon. Member for Canterbury (Mr. Crouch) reinforce that point. He was specifically asked to raise the question of pensions. There is a feeling of insecurity amongst the staff, which is reflected in the Government's mistaken attitude in putting the Bill through in the first place.
I do not know how Ministers view this matter. Recently I was talking to the directors of a large metal working company, which employs 15,000 people. They said that fear was a human emotion and that it had some part to play in employer-employee relations. They said that by creating unemployment the Government's policy was helping to create fear among workers and that they, the directors, regarded that as a good thing.
The Opposition reject that view. People should have a sense of security. Their loyalty and devotion should be reflected in decent terms and conditions of employment, not least among them being the provision of a reasonable pension entitlement at the end of their working lives. The Government's attitude has engendered fears that that entitlement might be prejudiced.
This is a probing amendment to remove Clause 30. I want to examine some of the subsections. There is a mysterious way of working. No doubt the Minister will be able to set our fears at rest by explaining that some of the legal provisions are routine.
In subsection (1)(c), for example, the Secretary of State may make an order for
the apportionment of a pension fund held for the purposes of a Post Office scheme between that scheme and a Corporation scheme".

There is then a reference to
the apportionment of payments payable under section 47 of that Act to trustees
and so on. That is the separation and apportionment about which people are concerned.
Subsection (3) provides:
An order under this section shall be so framed as to secure that no person other than the Post Office, the Corporation or any of the Corporation's subsidiaries is placed in a worse position than he would have been in if the order had not been made.
That is a comforting subsection. Therefore, no one would be worse off had the order not been made. However, it goes on to state that
An order shall not be invalid by reason that in fact it does not secure that result".
That is extraordinary. The legislation provides that an order must ensure that no one will be placed in a worse position had it not been made—that is a convoluted expression, anyhow—but that if the order does not secure the result set out in the legislation it does not make that order invalid.
The subsection continues:
but if the Secretary of State is satisfied or it is determined as hereinafter mentioned that an order has failed to secure that result, the Secretary of State shall as soon as possible make the necessary amending order".
What about the gap between one order and another? Any argument about the result of the first order can be referred to, and settled by, an industrial tribunal. That may take several months. The Minister may then make the second order, which is laid before the House for 40 days. Therefore, four or five months can pass—or perhaps six months, or longer—between the checking of the first order by the pension participants, the argument developing, the reference to an industrial tribunal, representations to the Minister following the decision of the tribunal, and the laying of another order.
Subsection (4) states:
An order under this section may be made so as to have effect from a date prior to the making thereof, so however that so much of any order as provides that any provision thereof is to have effect from a date prior to the making of the order shall not place any person other than the Post Office or the Corporation in a worse position than he would have been in if the order had been made to have effect only from the date of its making.
That is not exactly the clearest piece of English grammar, but I imagine that it gives the Secretary of State power to make a retrospective order covering the gap between the first order, a dispute arising that is settled and the laying of a second order that is given retrospective effect.
I cannot imagine a more convoluted procedure. It is legislatively undesirable. For one thing, it contains a specific retrospective provision. I do not object to that. Is this one of those circumstances in which the retrospective provision is designed to cover the gap between the laying of both orders following the reference to the industrial tribunal?
It would have been simpler to place a duty on the Secretary of State to hold consultations with the parties concerned before making an order. That should have been a requirement of the order. That should have been a vires consideration, so that if subsection (3) were not fulfilled the order would not be vires. In those circumstances, there would be no need for a second order, the retrospective provisions, or this cumbersome procedure.
Clearly, there are circumstances in which retrospection is necessary, but that is not the view of the Government. I am sure that they remember vividly their grave concern about the constitutional crisis that arose when the Labour


Government introduced section 4 of the Housing Finance (Special Provisions) Act to make retrospective provision for the Clay Cross councillors. I know that it was a much bigger issue, but at that time the Conservatives said that retrospection was wrong in principle. They did not say that there were times when it was necessary; they said that they tried to avoid it and that they did not like it on that occasion because they thought that it singled out people for preferential treatment. That was not true in any case, but they could have said that. But they said that they did not accept retrospective legislation in principle and that the Labour Government were bending the constitution. They said that all kinds of things were happening, when nothing of the sort had occurred. Yet they now come to the House, perhaps for perfectly good reasons, saying that retrospective legislation is necessary.
I make the general point that as a general rule the House does not look too kindly on retrospective legislation. Power is given to the Secretary of State to make an order to take effect from a date prior to the making thereof. That is a fairly unusual provision, and it behoves the Secretary of State to explain why it is there. The explanation that I have given may be correct. The provision may be there to ensure that there is no gap between the two orders and that retrospective powers are therefore needed.
The other point is that the provision is, by common consent, complicated. I do not think that even a Conservative Member would say that the procedure was straightforward, plain and, on the face of it, sensible. Subsection (5) provides that
An order under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
That means, of course, the negative procedure. It means a prayer. The order is tabled and if the prayer is successful it is annulled. As this kind of legislation is important for the confidence of people in two sections of a large and important industry in terms of pension provisions, and as, on the face of it, there are some rather convoluted legal provisions, I should have thought that an affirmative order would be better.
The negative procedure may sound fine—one tables a prayer, the issue is raised for debate, and if the prayer is carried a new order is introduced—but we all know that it is not quite like that. First, if a prayer is to be heard at all and time is to be allocated, the nature of this place is such that one has to get a few Privy Councillors' names attached to the prayer. That should not happen, because we are all elected equally. People do not dangle their Privy Councillorships at elections and gain votes thereby. Nevertheless, that is the case. If one can get Opposition Front Bench spokesmen to support the prayer there is an even greater certainty that it will be debated, but if one can get only two or three ordinary Back Benchers, who serve their party as they feel best able and fitted to do, the chances are that the prayer will never be given time on the Floor of the House.
That is the reality. From bitter experience of laying prayers on important issues, hon. Members know that they have to prod, persuade and cajole if the prayer is to be debated. Therefore, the negative procedure is far from satisfactory. In view of these somewhat strange provisions I should have thought that the Government would at least have proposed an affirmative resolution.
10.45 am
I hope that the Minister will be able to give an adequate explanation. The futures of thousands of people are bound up in these few words. They may be opposed to the Government's legislation. They may correctly think that it is dafter than necessary and that it has been put forward in order to satisfy some doctrinal quirk. Perhaps it has been put forward so that at their annual conference Conservative Members can say that they are getting to work on the public sector. Right-wingers will stand up and rave that a public sector exists despite the fact that the Conservative Government have been in power. The Government will have a few carrots to pull out of the bag. They will be able to show that they are getting ahead and that they are dismantling the Post Office and telecommunications. That may sound grand, but people's lives are involved.
People want to do a good job for the Post Office, but they see their determination and loyalty undermined by the provisions in general and by this clause in particular.

Mr. Don Dixon: Does not my hon. Friend agree that for a long time it was hard to recruit people into lower-paid jobs? One attraction was job security and a pension. Job security has been taken away by the provisions relating to hiving off the profitable parts of the industry. The Government now wish to interfere with pensions. The Government's track record on pensions shows that last year they did old-age pensioners out of a fortnight's rise by extending the year to 54 weeks. This year they have introduced legislation to take back 1 per cent. This November the Government will take away what they gave pensioners last November. I cannot imagine anyone in the industry trusting the Government or the Secretary of State.

Mr. Cryer: I have been dealing with the legislation before us. My hon. Friend is right to refer to the atmosphere that the Government have created. We are discussing the private pension scheme of a public corporation. Those who will be in receipt of pensions as the corporations are split off will bear in mind my hon. Friend's remarks. Under the Government, pensioners have had a bad deal. They say that the Government have cheated, particularly over their legislation to create a 54-week year. They ask how Parliament can do that. They ask how Parliament can twist a year in that way. We have to reply that Parliament can legislate, and that although we opposed it the Government had a majority and trampled through the Lobby.
People say that that must be a distortion of reality. We reply that that is what the Government have done. For one year there was almost level pegging, but the Government said that pensioners had received 1 per cent. too much and that they would pinch it back the following year.
The Government try to deny that that atmosphere exists. However, pensioners are concerned. That concern is spreading to all pensioners, or potential pensioners, who are also in receipt of private pensions. They say "If the Government can muck about with the State pension, what will they do next?" My hon. Friend the Member for Jarrow (Mr. Dixon) is correct about the Post Office, because it has not been noted for high pay. It could be argued that the telecommunications side has a much greater component of skill and therefore, higher-paid employees, but I do not think that that can be argued for the Post Office. A fair proportion of its employees receive lower rates of pay;


therefore they feel particularly vulnerable in the circumstances and are looking forward to obtaining pension rights as recompense for years of low pay.
I hope that the Minister will answer some of the questions that I have raised, because I think that he will agree that I have raised some cogent points, which need answering.

Mr. John Loveridge: I do not want to detain the House when it has been sitting for such a considerable time, but I echo the anxiety expressed by my hon. Friends the Members for Canterbury (Mr. Crouch) and for Uxbridge (Mr. Shersby).
Pensions are of great importance to those who are affected personally. Therefore, it is important that the House should give due consideration to the recipients' interests and fears. It is a matter in which right must not only be done but be seen to be done and, in addition, must be felt to be done by those whose futures are affected. I am sure that when the Secretary of State reaches his decision in due course he will do so reasonably and sensibly. He wants proper terms and pensions as well, but as it has not been possible to obtain a consensus of advice from management, unions and trustees it seems certain that the decision in the end will return to the Secretary of State.
When people find their conditions of service likely to be affected for the future it is natural that they should be worried and anxious. It was expressed to me in yesterday's lobby that the Post Office feels that its part of the existing business is the labour-intensive part. Therefore, if there is a split lasting a long time into the future, while people may be guarded by a provision which ensures that they will not be worse off, none the less they are anxious that the other part of the business might become considerably better off. One is a highly productive part of the service and the other, because it involves going on foot from house to house, must inevitably be less productive.
That is almost certain to give rise to fears in the minds, looking into the long-term distant future, that there will be a relationship between the output from the service and the pension paid. That does not exist under the present arrangements because they are likely to have the money shared across the board.
It is important for the Government to take that into account. Is there a need to rush to a decision? Would it not be possible to wait for some time and hope that, given time, all the people concerned—management, unions and trustees—will be able to come to a common agreement among them which will be far better and happier. It does not matter how good a decision is or how it is arrived at. It is important that it should be acceptable to those who have given such good service to the State in the past. In the case of the postmen, every one in the House knows the postal service to be so good. We have come to depend on it to such a degree. I hope that the Minister will think carefully about what has been said and to give some comfort to those who are worried.

Mr. Ioan Evans: Although there have been differences between both sides of the House, everyone agrees that Post Office workers are anxious about the pension fund. The hon. Members for Upminster Mr. Loveridge), for Canterbury (Mr. Crouch) and for Uxbridge (Mr. Shersby) confirm that. My right hon. Friend the Member for Manchester, Openshaw (Mr. Morris) told us convincingly

about the anxieties. We should give time to the matter. The pension measures should have been covered by a separate Bill. Three Bills have been rolled into one. We should have had a separate debate on telephone tapping, because the Bill deals mainly with hiving off certain sectors of the industry.
Telecommunications and postal workers give the country a tremendous service. An early-day motion tabled by Conservative Members pays tribute to them for the security of the letter post. Hon. Members have been influenced by the sensible and considerate lobby. The people who came from Wales were concerned not only with superannuation but with the other implications of the Bill. They believe that the Bill is against the national interest and will be detrimental to telecommunications and to the postal service. Superannuation was almost a postscript.

Dr. Alan Glyn: Does the hon. Gentleman agree that the pension fund is the most emotional aspect of the Bill? Post office workers are worried about the future. The trustees have a duty to them, but in the best interests of everyone the Minister should reconsider the matter and try to get agreement between all the parties. No one should be disadvantaged. The pension fund should be fairly distributed.

Mr. Evans: When people have given a lifetime's service to an industry they look forward to their pension. I do not know whether Post Office workers get even a gold watch. We are anxious about their rights. It is wrong that we do not know what is to happen. The lobby should not have had to come here to ask what is to happen about pension rights. I agree wholeheartedly with the hon. Gentleman. He exposes the Government's inadequate presentation of the matter. Hon. Members are apprehensive because of the anxieties expressed to them. What will we get from the Minister to allay these fears?

Mr. Kenneth Baker: Sit down.

11 am

Mr. Evans: I am invited to conclude my remarks. Why did not the Minister seek to intervene at an earlier stage to try to allay those fears? The fears still exist. We are now into another day. Those people who travelled from all parts of Britain to express their anxieties on this and other matters have now gone back. We were unable to help them because we do not know what the situation is. We possess at the moment a scrambled egg of a pension scheme to which those on the telecommunications side and those on the postal side have contributed. The Government have apparently to try to find a method of unscrambling the egg. On what grounds can the Minister claim that everything will be all right and that their proposal will be agreed? The telecommunications side and the Post Office have stated in a document that they want the funds to be separated. They say:
After careful consideration, and lengthy consultation with Post Office trades unions on the superannuation scheme trustees, the Post Office has recommended to the Secretary of State that British Telecom should establish its own pension scheme. The assets and liabilities of the existing Post Office scheme would be allocated fairly between it and the BT scheme.
How can it possibly be stated that the assets and liabilities of the scheme will be allocated fairly? What happens if it is suggested that the investment in ICI and in North. Sea oil will go to British Telecom and that the investment that


has occurred in numerous companies that have gone bankrupt or into liquidation is put in the Post Office side? That is the danger. The determination of how to split the assets will require the wisdom of Solomon.
There are people who make a living from advising on investment. It is not an easy task. Those who dabble on the Stock Exchange know that one day it goes up and one day it goes down. Some shares can be up and some can go to rock bottom. With one fund all the ups and downs are together in the scrambled egg. Can anyone claim that once a fund is separated, the benefits accruing to one or the other will be the same, and that one or the other will not be the loser? That is the anxiety that has been expressed.
The document adds:
British Telecom and the Post Office believe that to have separate schemes, each on essentially the same lines as the present scheme, will be in the best interests of the staff of the new corporations. Both corporations will be very large employers and both the new schemes will be anong the half dozen largest in Britain".
They say that they want the schemes to be separated. Who should be considered? The trade unions, although there is a difference between them, say that the scheme should not be separated for the time being. One union says that there should be no separation yet. The other union does not want separation. Both say that the funds should not be separated. Should the House listen to the trade unions or to the new companies? Those with whom we should be concerned are the trustees, elected by the beneficiaries, who state definitely that the fund should not be separated.
Surely, the Government should have regard to the trustees. Why are we discussing money that has been contributed to a fund over the years by people who never expected that any Government would bring in this stupid proposal to have separate funds? They had no idea what would happen in the future. They are looking forward to their pensions, but now they do not know how the two halves will be treated.
What arguments are there to persuade us to accept the clause? The heads of the two industries are appointed by the Government, and clearly they have to have regard to what the Government want. That is one of the weaknesses in looking to the two corporations—the Post Office and BT. It is better to look to the trustees and consider what factors have influenced them.
We are told that:
One of the factors which has strongly influenced both BT and the Post Office"—
apparently, this is the reason why they are to be separated—
is the Inland Revenue requirement that the staff contributions of one employer cannot be used to finance the staff benefits of another".
If the Government will the end they should will the means. Surely the Treasury could get together with the Inland Revenue. There is a presumption in the document that the benefit going to one will be greater than the benefit to the other, but we are assured that that is not so.
The document goes on:
This means having to maintain quite separate financial arrangements for contributions and benefits for each corporation, even within a nominally single scheme, otherwise the tax benefits are lost. The schemes have to be virtually separate in practice.

In my opinion that is a false argument. It may well be the present situation in the Inland Revenue, but if the Government wish to keep the funds together there is no reason why they should not get in touch with the Inland Revenue to make an exception in the special circumstances.
The document then says:
Most of the Post Office trade unions and a majority of the Trustees have said that they would prefer to retain one scheme for both corporations.
That, surely, is what the House should consider. The major trade unions and the trustees have said that they would prefer to have one scheme. The document continues:
Since it has not been possible to achieve a consensus of all parties it will fall to the Secretary of State to decide what he will do.
So we are acquiring a pig in a poke. There has been no consensus. We are leaving it to the Secretary of State. Unless we have a copper-bottomed guarantee from the Minister we shall not know what we are agreeing to. We are failing the people who lobbied us, who are anxious about their pensions and who do not know what is to happen to them. Unless we obtain definite guarantees, we shall be letting those people down.
Before proposals are made to the House we must be assured that the Government will have further discussions and arrive at a consensus. After all, we are talking about the pension rights of people who are still employed and of people who are retired. The document states:
If separate schemes are adopted … the BT scheme would provide for the same employee contribution and the same staff retirement benefits as the existing Trust Deed. Nor would separate schemes necessarily require the extensive investments of the present scheme to be divided.
Apparently there is no need for the investments to be divided.
They would continue to be administered jointly as a central fund if this were felt to be the best course.
Why cannot pension rights be kept separate from the other measures in the Bill? There has been unanimity in the House about the matter. I hope that there will be unanimity in the Division Lobby if we are compelled to divide.
I hope that the Minister will be able to assure us that our constituents' anxieties are unwarranted and that pensions will be safeguarded. When my constituents came to see me they objected to the whole Bill. However, this is an emotional issue. I hope that the Minister will provide real assurances.

Mr. Gregor MacKenzie: I do not intend to prevent hon. Members from making further contributions. However, it is sensible for me to say a few words and for the Minister to allay our fears. Sincere and genuine contributions have been made from both sides of the House by hon. Members with experience of the subject.
On Second Reading the Secretary of State said:
No decision has yet been taken on the future of the Post Office pension fund. The enabling powers contained in clause 30 allow the Secretary of State either to split the fund or to retain a single fund for employees of both corporations … The final decision on the future of the fund will be taken only after all interested parties have been able to make their views known to me."—[Official Report, 2 December 1980; Vol. 995, c. 219].
I hope that the Secretary of State is still listening with care to representations by trade unionists and hon. Members. We are discussing a retirement fund that involves many hundreds of thousands of people. Everybody is concerned about the future. It is right that we should express such views, even at some length. The


views have been conveyed to the Secretary of State officially by the trade unions and by right hon. and hon. Members on both sides. It is time that the Secretary of State spelt out his assessment of the representations.
11.15 am
I am not an expert on the fund. I have respect for both the chairmen. They have told the Secretary of State that they prefer the fund to be split. As I understand it, their view is that because the Post Office is to be split the fund should be divided accordingly. For the life of me I cannot see that there is any logical reason why, because the Secretary of State and his colleagues in the Government have decided to split the Post Office, the fund should be split. Certainly I cannot see any reason why we should choose to split the fund at this stage. No one has taken the trouble to explain the advantages to me or try to persuade me that this course of action should be adopted.

Mr. Henderson: I have listened with great care to the hon. Gentleman and his right hon. Friend the Member for Manchester, Openshaw (Mr. Morris), who opened the debate. Does the hon. Gentleman feel that there was validity in the argument put forward by BT that even if a single pension fund were retained there would have to be separate arrangements in view of the Inland Revenue regulations, and that separate schemes would not necessarily require that the extensive investments of the present scheme be divided?

Mr. MacKenzie: With great respect, it is not for me to make an assessment of that kind. I am asking the Minister what assessment he has made. I feel that it is very much a matter of what is thought to be administratively convenient, because that is the only possible explanation that has been suggested to me at any stage.
One hon. Gentleman quoted, as I did in Committee, from that very humorous programme "Yes, Minister". I think that if that Minister's permanent secretary were to be asked to say why he favoured this proposal he would reply "It would tidy things up, Minister." It looks to me as though people think that it is a tidying-up exercise and forget that there is a great deal more to the fund than just making it neat and tidy.
In the course of our deliberations, as the Minister will recall, my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris) reminded us with considerable skill and detail that we are talking about £3·5 million—a fund that not only has investments in about 1,400 companies but has land and other investments of that kind.
The point that came home to me from my hon. Friend's comments and persuaded me that there was considerable merit in looking at this whole question was that the trustees of the fund and Sir Daniel Pettit, the very skilled administrator, who is the chairman of the fund and is well regarded in the public life of this country, have said that it would take about five years to split the fund. Therefore I can see no urgency at all about this matter. Indeed, I can see considerable difficulties in trying to split the fund at this time. I do not have the expertise that perhaps some of my colleagues on both sides of the House have in the buying and selling of stocks and shares, but I would not have thought that this was a particularly appropriate time at which to look around in the market and try to dispose of the money in the fund.
Above all, however, I think that the staff really need to be assured about the whole matter. They know that at

present they have a well-managed fund. They know that the investments that they have are good and that they should not be scattered. They know, above all, that it is very much cheaper, administratively, to run one fund than to run two.
For those reasons I hope that the Minister will be able to give some sort of assurance about these matters at this stage in our deliberations.

Mr. Speaker: Mr. Kenneth Baker—

Mr. Alan Clark: On a point of order, Mr. Speaker. As you know, there was a lobby of Post Office workers who came from our constituencies yesterday. I think that everyone who spoke to them was struck by the reasonable, courteous and attentive way in which they put cases to us. Do you really think it appropriate, Mr. Speaker, that in a debate that has already lasted for over 18 hours no Back Bencher should be permitted even for one or two minutes to put a case to the Minister for reply on their behalf?

Mr. Speaker: I was in the Chair for three hours earlier this morning when there was plenty of opportunity for hon. Members to speak. I accept that during that time the House was not dealing with amendment No. 52. I have already called the Minister—

Mrs. Elaine Kellett-Bowman: rose—

Mr. Speaker: Order. I have called the Minister and we must proceed.

Mr. Baker: If my hon. Friends wish to participate in the debate, they will be able to do so when I have resumed my seat. I was urged by some Labour Members to intervene early in the debate so that I could answer for the Government at the beginning.
I think that hon. Members on both sides of the House will appreciate that this is one of the issues that have caused the greatest anxiety and concern among postal and telephone workers. I am aware that during the lobby yesterday they focused very much upon their worries about what might happen to their pensions. That is entirely understandable. Apart from one's own house, a pension is probably the most valuable asset, or right to an asset, that will be acquired during one's lifetime.
I shall try to allay some of the anxieties that have been expressed by hon. Members on both sides of the House. The hon. Member for Newcastle-under-Lyme (Mr. Golding) and the right hon. Member for Manchester, Openshaw (Mr. Morris) from the Opposition Benches and my hon. Friends the Members for Uxbridge (Mr. Shersby), Canterbury (Mr. Crouch) and Upminster (Mr. Loveridge), and in an intervention my hon. Friend the Member for Windsor and Maidenhead (Dr. Glyn), have said that this is an emotional issue. I accept that.
It has been said that this is a face-saving exercise for Ministers. I refute that charge, because Ministers have not made up their minds. I had not made up my mind and my right hon. Friend the Secretary of State made it clear on Second Reading that he had not made up his mind. I can assure the House that we have not reached a decision. We do not intend to come to a decision for some months. I want to satisfy myself that I have heard all the views and representations of the various interested parties.
I have already met trade union leaders or their deputies and we have talked the issue through. There is a slight difference of opinion between the two main unions


concerned. This is not a major difference but a slight difference in emphasis that was touched upon by the hon. Member for Newcastle-under-Lyme. I have also spoken to the trustees. I have had one meeting with the trustees and I intend to have a further meeting with them.
The trustees are not unanimous in their view. There is a difference of opinion among the trustees on how the matter should be treated. The board of the Post Office and the two chairmen designate both feel that the fund should be split. That view is shared by one of the smaller unions. There are differences of opinion. The issues are complex and I know that views are held strongly. It will not be possible to preserve the status quo absolutely. One of the reasons why I hope that the clause will not be defeated—it would be disastrous if it were voted down—is that it gives to the Secretary of State essential powers to make other changes that are necessary.
Even if one fund were maintained there would have to be a number of detailed amendments to the trust deed. Separate estimates of the pension liabilities of the two businesses have already been made. That would have to be continued.
The hon. Member for Aberdare (Mr. Evans) mentioned the Inland Revenue requirements, but those are exacting. The trustees tell me that in any event there will have to be two separate schemes, one for each corporation, which will have to be separately accounted for. The liabilities and assets will have to be separately assessed, and the contributions separately drawn in and the payments separately paid out. It is likely that those two schemes will have to have two sets of independent trustees. Therefore, there will be much de facto splitting which flows from the Inland Revenue regulations. I must resist the temptation put before me by the hon. Member for Aberdare to take on the Inland Revenue insurance pension fund regulations. I am sure that the hon. Gentleman will know that that is a non-starter. Ministers do not have powers to make special arrangements in special circumstances, and rightly so.

Mr. Mikardo: Are there other cases in which Ministers have power to make regulations on pension funds, or is this case a one-off?

Mr. Baker: I do not know the answer to that question, but I imagine that in other nationalisation statutes there must have been similar provisions, when funds were originally established. I shall find out about that and write to the hon. Member.

Dr. Glyn: Is there any statutory debarment, whereby the funds' investment can remain separate, whereas the distribution and the payments of the various amounts to which the individuals are entitled should not be separate? In other words, the investment should remain the same, but the distribution and payments should be different. Is there an Act of Parliament for that?

Mr. Baker: Before I answer that question, may I say that news has already reached me which will save me writing a letter to the hon. Member for Bethnal Green and Bow (Mr. Mikardo)? That is a fairly common provision in nationalised industry statutes.
I turn to the latter question. One solution which has been put to us is that, although there must be separate

schemes, it would be possible, in certain circumstances, to retain a common fund. That would be largely for management purposes only of the fund, and that is one of the alternatives which I am considering.
I should like to satisfy the anxieties of all hon. Members that that matter is being considered most carefully and thoroughly. I am particularly concerned that in whatever change is made the pension entitlement cannot be removed or reduced by any action by me or any other Minister under the Bill. That is the basic assurance which the people who came to the lobby wanted to have yesterday. There are other more complicated issues about the relationship between the two unions, and their different views. The basic assurance is that no pension entitlement can be removed or reduced by any order under the Bill.

Mr. Loveridge: Is the question which was put to me in the lobby not merely about the fact that the pension entitlement will not be reduced but that if the two parts are separated one part will not grow differentially much greater in benefit for pension than the other? Therefore, the postman will be left behind.

Mr. Baker: That is an important issue for the management of the two corporations and the unions broadly representing those corporations to resolve. That matter is not for the Minister to decide. It is an issue of parity of treatment. It is essentially a matter on which the two new boards and unions should get together. Perhaps they will want to provide various better benefits in some cases, or they may want them to stay the same. That is a matter for the future. It does not necessarily depend on the splitting of the fund, because there will be two separate schemes.

Mrs. Kellett-Bowman: I am glad that I failed to catch Mr. Speaker's eye before my hon. Friend spoke, because I am delighted to know that he has not made up his mind and will not do so until he has further heard all the interested parties. I am also glad to know that the pension entitlement cannot be removed or reduced under the Bill. Therefore, it will not be necessary for me to catch Mr. Speaker's eye afterwards. I was relieved to hear that statement by my hon. Friend.

Mr. Baker: I am grateful to my hon. Friend for her comments. I am pleased that in this long night I have satisfied at least one hon. Member.

Mr. Cryer: The Minister said that the pension entitlement could not be removed, but he has not yet answered the point that orders made by the Minister can have a gap between them. The legislation as drafted is distinctly cumbersome and has a retrospective effect. Is that retrospective effect to fill the possible gap between two orders to prevent any removal of entitlement?

Mr. Baker: Ordinarily, yes. That is a safety-net provision.

Mr. Crouch: My hon. Friend has not yet answered the question about the splitting of the fund into two funds costing more money. A figure of £1 million extra has been mentioned. Will he answer that question?

Mr. Baker: I am exploring this matter with the trustees. It is one of the factors that I shall be taking into account.

Mr. Ioan Evans: The Minister having given certain assurances, we may not wish to divide on the amendment. However, before the Bill comes back for Royal Assent, will he make a statement to the House outlining the provisions of any scheme that he may agree?

Mr. Baker: I do not want to be tied to a time. I want to examine the matter with other interested parties. I shall do it in a reasonable time. I shall not rush it.

Amendment negatived.

Clause 47

INTERCEPTION OF MESSAGES

Amendment proposed: No. 54 in page 39, line 36, leave out clause 47 and insert—

47. (1) A person who—

(a) intentionally intercepts any message or other matter carried by means of a public telecommunication system (including any such system provided, under a licence, otherwise than by the Corporation);
(b) instigates any person engaged in the business of the Corporation to intercept such a message or other matter; or
(c) discloses the contents of any message or other matter intercepted under paragraph (a) or (b) above,
unless acting in obedience to a warrant issued pursuant to the following provisions of this section, shall be guilty of an offence and liable on conviction on indictment to a fine not exceeding £5,000 or to imprisonment for a term not exceeding three years or to both.

(2) Proceedings for an offence under subsection (1) above shall not be instituted in England or Wales except by or with the consent of the Attorney General, or in Northern Ireland except by or with the consent of the Attorney General for Northern Ireland.

(3) No person shall be guilty of an offence under subsection (1) above as respects any act done by him whilst engaged in the business of the Corporation.

(4) The Secretary of State may, on the application of a chief officer of police or the Commissioners of Customs and Excise, issue a warrant for the interception and disclosure of telecommunications if he is satisfied that—

(a) it would assist in the detection of a serious offence;
(b) normal methods of investigation have been tried and have failed or from the nature of things are unlikely to succeed if tried; and
(c) there is good reason to think that the interception would result in a conviction for that offence.

In this subsection "serious offence" means—

(i) an offence for which a person not previously convicted could reasonably be expected to be sentenced to imprisonment for a term of three years; or
(ii) an offence in which either a large number of people is involved or there is good reason to apprehend the use of violence.

(5) The Secretary of State may, on the application of a chief officer of police or the Director-General of the Security Service issue a warrant for the interception and disclosures of telecommunications if he is satisfied that—

(a) it would assist in the detection of a major subversive, terrorist or espionage activity giving rise to external or internal danger to the Defence of the Realm; and
(b) normal methods of investigation have been tried and have failed or from the nature of things are unlikely to succeed if tried.

(6) An application for a warrant under this section shall be made in writing and shall specify—

(a) the person whose telecommunications it is sought to intercept and the telecommunications in question; and
(b) the facts and circumstances in support of the application; but the Secretary of State may allow any information required under paragraph (b) above to be provided orally and not in writing in respect of an application for a warrant under subsection (5) above.

(7) Except in a case of emergency, any warrant under this section shall be issued only under the hand of the Secretary of State; and, in any such case, shall be confirmed under his hand as soon as reasonably practicable after issue.

(8) In this section "intercept" includes the doing of any act designed to enable an interception to take place, and "intercepts", "intercepted" and "interception" shall be construed accordingly.—[Mr. Golding.]

Amendment proposed to the proposed amendment: (a), in subsection (5)(a), leave out "subversive".—[Mr. Mikardo.]

Question put, That the amendment to the proposed amendment be made:—

The House divided: Ayes 145, Noes 255.

Division No. 140]
[11.32 am


AYES


Abse, Leo
Home Robertson, John


Adams, Allen
Homewood, William


Alton, David
Hooley, Frank


Anderson, Donald
Howells, Geraint


Ashton, Joe
Hudson Davies, Gwilym E.


Barnett, Guy (Greenwich)
Janner, Hon Greville


Beith, A. J.
John, Brynmor


Bennett, Andrew (St'kp't N)
Johnson, James (Hull West)


Booth, Rt Hon Albert
Johnston, Russell (Inverness)


Bray, Dr Jeremy
Jones, Barry (East Flint)


Brown, Hugh D. (Provan)
Jones, Dan (Burnley)


Brown, Ron (E'burgh, Leith)
Kaufman, Rt Hon Gerald


Brown, Ronald W. (H'ckn'y S)
Kilroy-Silk, Robert


Callaghan, Jim (Midd't'n &amp; P)
Kinnock, Neil


Campbell-Savours, Dale
Lyons, Edward (Bradf'd W)


Carmichael, Neil
Mabon, Rt Hon Dr J, Dickson


Carter-Jones, Lewis
McDonald, Dr Oonagh


Cartwright, John
McElhone, Frank


Clark, Dr David (S Shields)
McGuire, Michael (Ince)


Cook, Robin F.
McKelvey, William


Cowans, Harry
McNally, Thomas


Crowther, J. S.
McNamara, Kevin


Cryer, Bob
McTaggart, Robert


Cunliffe, Lawrence
McWilliam, John


Cunningham, G. (Islington S)
Magee, Bryan


Dalyell, Tam
Marshall, Dr Edmund (Goole)


Davidson, Arthur
Marshall, Jim (Leicester S)


Dewar, Donald
Martin, M (G'gow S'burn)


Dixon, Donald
Maxton, John


Dobson, Frank
Mitchell, Austin (Grimsby)


Douglas, Dick
Morris, Rt Hon C. (O'shaw)


Dubs, Alfred
Moyle, Rt Hon Roland


Duffy, A. E. P.
O'Halloran, Michael


Dunwoody, Hon Mrs G.
O'Neill, Martin


Eadie, Alex
Pavitt, Laurie


Eastham, Ken
Pendry, Tom


Edwards, R. (W'hampt'n S E)
Penhaligon, David


Ellis, R. (NE D'bysh're)
Powell, Raymond (Ogmore)


Ellis, Tom (Wrexham)
Price, C. (Lewisham W)


English, Michael
Race, Reg


Ennals, Rt Hon David
Richardson, Jo


Evans, Ioan (Aberdare)
Robertson, George


Field, Frank
Robinson, G. (Coventry NW)


Fitt, Gerard
Rooker, J. W.


Flannery, Martin
Roper, John


Fletcher, Ted (Darlington)
Ross, Ernest (Dundee West)


Forrester, John
Ross, Stephen (Isle of Wight)


Foster, Derek
Rowlands, Ted


Freud, Clement
Sheerman, Barry


Garrett, John (Norwich S)
Sheldon, Rt Hon R.


George, Bruce
Shore, Rt Hon Peter


Gilbert, Rt Hon Dr John
Silkin, Rt Hon J. (Deptford)


Gourlay, Harry
Smith, Cyril (Rochdale)


Graham, Ted
Soley, Clive


Grant, George (Morpeth)
Spearing, Nigel


Grimond, Rt Hon J.
Spriggs, Leslie


Hamilton, W. W. (C'tral Fife)
Steel, Rt Hon David


Hardy, Peter
Stewart, Rt Hon D. (W Isles)


Hart, Rt Hon Dame Judith
Stoddart, David


Heffer, Eric S.
Stott, Roger


Hogg, N. (E Dunb't'nshire)
Strang, Gavin


Holland, S. (L'b'th, Vauxh'll)
Taylor, Mrs Ann (Bolton W)






Thorne, Stan (Preston South)
Williams, Rt Hon A. (S'sea W)


Tilley, John
Wilson, Gordon (Dundee E)


Urwin, Rt Hon Tom
Winnick, David


Wainwright, E. (Dearne V)
Woodall, Alec


Wainwright, R. (Colne V)
Young, David (Bolton E)


Watkins, David



Welsh, Michael
Tellers for the Ayes:


White, Frank R.
Mr. Ian Mikardo and Mr. Dennis Skinner.


Whitehead, Phillip



Wigley, Dafydd





NOES


Adley, Robert
Finsberg, Geoffrey


Alexander, Richard
Fisher, Sir Nigel


Alison, Michael
Fletcher, A. (Ed'nb'gh N)


Ancram, Michael
Fletcher-Cooke, Sir Charles


Arnold, Tom
Fookes, Miss Janet


Aspinwall, Jack
Forman, Nigel


Atkins, Rt Hon H. (S'thorne)
Fowler, Rt Hon Norman


Atkins, Robert (Preston N)
Fox, Marcus


Atkinson, David (B'm'th, E)
Fraser, Peter (South Angus)


Baker, Kenneth(St. M'bone)
Fry, Peter


Baker, Nicholas (N Dorset)
Gardiner, George (Reigate)


Banks, Robert
Garel-Jones, Tristan


Beaumont-Dark, Anthony
Glyn, Dr Alan


Bendall, Vivian
Goodlad, Alastair


Bennett, Sir Frederic (T'bay)
Gorst, John


Benyon, Thomas (A'don)
Gow, Ian


Benyon, W. (Buckingham)
Gower, Sir Raymond


Bevan, David Gilroy
Grant, Anthony (Harrow C)


Biffen, Rt Hon John
Gray, Hamish


Biggs-Davison, John
Greenway, Harry


Blackburn, John
Griffiths, E. (B'y St. Edm'ds)


Bonsor, Sir Nicholas
Griffiths, Peter Portsm'th N)


Boscawen, Hon Robert
Grist, Ian


Bottomley, Peter (W'wich W)
Grylls, Michael


Bowden, Andrew
Gummer, John Selwyn


Boyson, Dr Rhodes
Hamilton, Hon A.


Bright, Graham
Hamilton, Michael (Salisbury)


Brinton, Tim
Hampson, Dr Keith


Brittan, Leon
Hannam, John


Brooke, Hon Peter
Haselhurst, Alan


Brotherton, Michael
Hastings, Stephen


Brown, Michael (Brigg &amp; Sc'n)
Havers, Rt Hon Sir Michael


Browne, John (Winchester)
Hawkins, Paul


Bruce-Gardyne, John
Hawksley, Warren


Bryan, Sir Paul
Heddle, John


Buck, Antony
Henderson, Barry


Budgen, Nick
Heseltine, Rt Hon Michael


Bulmer, Esmond
Hicks, Robert


Butcher, John
Hill, James


Cadbury, Jocelyn
Hogg, Hon Douglas (Gr'th'm)


Carlisle, John (Luton West)
Hooson, Tom


Carlisle, Kenneth (Lincoln)
Howe, Rt Hon Sir Geoffrey


Chalker, Mrs. Lynda
Howell, Rt Hon D. (G'ldf'd)


Channon, Rt. Hon. Paul
Howell, Ralph (N Norfolk)


Chapman, Sydney
Hunt, David (Wirral)


Churchill, W. S.
Jenkin, Rt Hon Patrick


Clark, Hon A. (Plym'th, S'n)
Jessel, Toby


Clark, Sir W. (Croydon S)
Jopling, Rt Hon Michael


Clarke, Kenneth (Rushcliffe)
Joseph, Rt Hon Sir Keith


Cockeram, Eric
Kaberry, Sir Donald


Corrie, John
Kellett-Bowman, Mrs Elaine


Costain, Sir Albert
Kershaw, Sir Anthony


Cranborne, Viscount
King, Rt Hon Tom


Crouch, David
Knight, Mrs Jill


Dean, Paul (North Somerset)
Knox, David


Dickens, Geoffrey
Lamont, Norman


Dorrell, Stephen
Lang, Ian


Douglas-Hamilton, Lord J.
Latham, Michael


Dover, Denshore
Lawrence, Ivan


du Cann, Rt Hon Edward
Lawson, Rt Hon Nigel


Dunn, Robert (Dartford)
Lee, John


Durant, Tony
Lennox-Boyd, Hon Mark


Dykes, Hugh
Lester, Jim (Beeston)


Eden, Rt Hon Sir John
Lewis, Kenneth (Rutland)


Eggar, Tim
Lloyd, Peter (Fareham)


Fairbairn, Nicholas
Loveridge, John


Faith, Mrs Sheila
Luce, Richard


Fenner, Mrs Peggy
McCrindle, Robert





McCusker, H.
Shaw, Giles (Pudsey)


MacGregor, John
Shelton, William (Streatham)


MacKay, John (Argyll)
Shepherd, Colin (Hereford)


McNair-Wilson, M. (N'bury)
Shepherd, Richard


McNair-Wilson, P. (New F'st)
Shersby, Michael


McQuarrie, Albert
Silvester, Fred


Madel, David
Sims, Roger


Major, John
Smith, Dudley


Marland, Paul
Speed, Keith


Marlow, Tony
Speller, Tony


Marshall, Michael (Arundel)
Spicer, Jim (West Dorset)


Mather, Carol
Spicer, Michael (S Worcs)


Maude, Rt Hon Sir Angus
Sproat, Iain


Mawby, Ray
Squire, Robin


Mawhinney, Dr Brian
Stanbrook, Ivor


Mayhew, Patrick
Steen, Anthony


Meyer, Sir Anthony
Stevens, Martin


Miller, Hal (B'grove)
Stewart, Ian (Hitchin)


Mills, Iain (Meriden)
Stewart, A. (E Renfrewshire)


Mills, Peter (West Devon)
Stokes, John


Moate, Roger
Stradling Thomas, J.


Monro, Hector
Taylor, Teddy (S'end E)


Montgomery, Fergus
Temple-Morris, Peter


Moore, John
Thatcher, Rt Hon Mrs M.


Morgan, Geraint
Thomas, Rt Hon Peter


Morris, M. (N'hampton S)
Thompson, Donald


Morrison, Hon C. (Devizes)
Thorne, Neil (Ilford South)


Morrison, Hon P. (Chester)
Thornton, Malcolm


Mudd, David
Townend, John (Bridlington)


Murphy, Christopher
Townsend, Cyril D, (B'heath)


Neale, Gerrard
Trippier, David


Needham, Richard
Trotter, Neville


Nelson, Anthony
van Straubenzee, W. R.


Neubert, Michael
Vaughan, Dr Gerard


Newton, Tony
Viggers, Peter


Onslow, Cranley
Waddington, David


Oppenheim, Rt Hon Mrs S.
Wakeham, John


Osborn, John
Waldegrave, Hon William


Page, Rt Hon Sir G. (Crosby)
Walker, B. (Perth)


Page, Richard (SW Herts)
Walker-Smith, Rt Hon Sir D.


Parris, Matthew
Waller, Gary


Patten, Christopher (Bath)
Ward, John


Pawsey, James
Warren, Kenneth


Percival, Sir Ian
Watson, John


Pink, R. Bonner
Wells, John (Maidstone)


Pollock, Alexander
Wells, Bowen


Porter, Barry
Wheeler, John


Price, Sir David (Eastleigh)
Whitelaw, Rt Hon William


Proctor, K. Harvey
Whitney, Raymond


Pym, Rt Hon Francis
Wickenden, Keith


Raison, Timothy
Wiggin, Jerry


Rathbone, Tim
Wilkinson, John


Rees-Davies, W. R.
Williams, D.(Montgomery)


Renton, Tim
Winterton, Nicholas


Rhodes James, Robert
Wolfson, Mark


Ridley, Hon Nicholas
Young, Sir George (Acton)


Rifkind, Malcolm
Younger, Rt Hon George


Roberts, Wyn (Conway)



Rossi, Hugh
Tellers for the Noes:


Rost, Peter
Mr. Spencer Le Marchant and Mr. John Cope.


Sainsbury, Hon Timothy



Scott, Nicholas

Question accordingly negatived.

Amendment proposed to the proposed amendment: (b) at end add—
'"subversive activity" means activity whose objective is the overthrow by force of the government of the Realm'.—[Mr. Mikardo.]

Question put, That the amendment to the proposed amendment be made:—

The House divided: Ayes 147, Noes 260.

Division No. 141]
[11.44 am


AYES


Adams, Allen
Barnett, Guy (Greenwich)


Alton, David
Beith, A. J.


Anderson, Donald
Bennett, Andrew (St'kp't N)


Ashton, Joe
Booth, Rt Hon Albert






Bray, Dr Jeremy
Leighton, Ronald


Brown, Hugh D. (Provan)
Lewis, Ron (Carlisle)


Brown, R. C. (N'castle W)
Litherland, Robert


Brown, Ron (E'burgh, Leith)
Lofthouse, Geoffrey


Brown, Ronald W. (H'ckn'y S)
Lyons, Edward (Bradf'd W)


Callaghan, Jim (Midd't'n &amp; P)
Mabon, Rt Hon Dr J. Dickson


Campbell-Savours, Dale
McDonald, Dr Oonagh


Carmichael, Neil
McGuire, Michael (Ince)


Carter-Jones, Lewis
McKelvey, William


Cartwright, John
MacKenzie, Rt Hon Gregor


Clark, Dr David (S Shields)
McNally, Thomas


Cocks, Rt Hon M. (B'stol S)
McNamara, Kevin


Coleman, Donald
McTaggart, Robert


Cook, Robin F.
McWilliam, John


Cowans, Harry
Magee, Bryan


Crowther, J. S.
Marshall, Jim (Leicester S)


Cunliffe, Lawrence
Martin, M (G'gow S'burn)


Cunningham, G. (Islington S)
Maxton, John


Dalyell, Tam
Mikardo, Ian


Davidson, Arthur
Morris, Rt Hon C. (O'shaw)


Deakins, Eric
Moyle, Rt Hon Roland


Dean, Joseph (Leeds West)
O'Halloran, Michael


Dixon, Donald
Orme, Rt Hon Stanley


Dubs, Alfred
Pavitt, Laurie


Duffy, A. E. P.
Pendry, Tom


Dunwoody, Hon Mrs G.
Penhaligon, David


Eadie, Alex
Powell, Raymond (Ogmore)


Eastham, Ken
Race, Reg


Edwards, R. (Whampt'n S E)
Richardson, Jo


Ellis, R. (NE D'bysh're)
Robertson, George


Ellis, Tom (Wrexham)
Rooker, J. W.


English, Michael
Roper, John


Ennals, Rt Hon David
Ross, Ernest (Dundee West)


Evans, Ioan (Aberdare)
Ross, Stephen (Isle of Wight)


Field, Frank
Rowlands, Ted


Fitt, Gerard
Sheerman, Barry


Fletcher, Ted (Darlington)
Sheldon, Rt Hon R.


Ford, Ben
Shore, Rt Hon Peter


Forrester, John
Skinner, Dennis


Foster, Derek
Smith, Cyril (Rochdale)


Freud, Clement
Snape, Peter


Garrett, John (Norwich S)
Spearing, Nigel


George, Bruce
Spriggs, Leslie


Gourlay, Harry
Stallard, A. W.


Graham, Ted
Steel, Rt Hon David


Grant, George (Morpeth)
Stewart, Rt Hon D. (W Isles)


Grimond, Rt Hon J.
Stoddart, David


Hamilton, James (Bothwell)
Stott, Roger


Hamilton, W. W. (C'tral Fife)
Strang, Gavin


Hardy, Peter
Straw, Jack


Hart, Rt Hon Dame Judith
Taylor, Mrs Ann (Bolton W)


Hattersley, Rt Hon Roy
Thomas, Dr R. (Carmarthen)


Haynes, Frank
Thorne, Stan (Preston South)


Heffer, Eric S.
Tilley, John


Hogg, N. (E Dunb't'nshire)
Tinn, James


Holland, S. (L'b'th, Vauxh'll)
Urwin, Rt Hon Tom


Home Robertson, John
Wainwright, E. (Dearne V)


Homewood, William
Wainwright, H. (Colne V)


Hooley, Frank
Welsh, Michael


Howells, Geraint
White, Frank R.


Huckfield, Les
Whitehead, Phillip


Hughes, Robert (Aberdeen N)
Wigley, Dafydd


Janner, Hon Greville
Williams, Rt Hon A. (S'sea W)


John, Brynmor
Wilson, Gordon (Dundee E)


Johnston, Russell (Inverness)
Winnick, David


Jones, Barry (East Flint)
Woodall, Alec


Jones, Dan (Burnley)
Young, David (Bolton E)


Kaufman, Rt Hon Gerald



Kilroy-Silk, Robert
Tellers for the Ayes:


Kinnock, Neil
Mr. Christopher Price and Mr. Bob Cryer.


Leadbitter, Ted





NOES


Adley, Robert
Atkins, Robert (Preston N)


Alexander, Richard
Atkinson, David (B'm'th, E)


Alison, Michael
Baker, Kenneth (St. M'bone)


Ancram, Michael
Baker, Nicholas (N Dorset)


Arnold, Tom
Banks, Robert


Aspinwall, Jack
Beaumont-Dark, Anthony


Atkins, Rt Hon H. (S'thorne)
Bendall, Vivian





Bennett, Sir Frederic (T'bay)
Hamilton, Hon A.


Benyon, Thomas (A'don)
Hamilton, Michael (Salisbury)


Benyon, W. (Buckingham)
Hampson, Dr Keith


Bevan, David Gilroy
Hannam, John


Biffen, Rt Hon John
Haselhurst, Alan


Biggs-Davison, John
Hastings, Stephen


Blackburn, John
Havers, Rt Hon Sir Michael


Bonsor, Sir Nicholas
Hawkins, Paul


Boscawen, Hon Robert
Hawksley, Warren


Bottomley, Peter (W'wich W)
Heddle, John


Bowden, Andrew
Henderson, Barry


Boyson, Dr Rhodes
Heseltine, Rt Hon Michael


Bright, Graham
Hicks, Robert


Brinton, Tim
Hill, James


Brittan, Leon
Hogg, Hon Douglas (Gr'th'm)


Brooke, Hon Peter
Hooson, Tom


Brotherton, Michael
Howe, Rt Hon Sir Geoffrey


Brown, Michael (Brigg &amp; Sc'n)
Howell, Rt Hon D. (G'ldf'd)


Browne, John (Winchester)
Howell, Ralph (N Norfolk)


Bruce-Gardyne, John
Hunt, David (Wirral)


Bryan, Sir Paul
Jenkin, Rt Hon Patrick


Buck, Antony
Jessel, Toby


Budgen, Nick
Jopling, Rt Hon Michael


Bulmer, Esmond
Joseph, Rt Hon Sir Keith


Butcher, John
Kaberry, Sir Donald


Cadbury, Jocelyn
Kellett-Bowman, Mrs Elaine


Carlisle, John (Luton West)
Kershaw, Anthony


Carlisle, Kenneth (Lincoln)
King, Rt Hon Tom


Chalker, Mrs. Lynda
Knight, Mrs Jill


Channon, Rt. Hon. Paul
Knox, David


Chapman, Sydney
Lamont, Norman


Churchill, W. S.
Lang, Ian


Clark, Hon A. (Plym'th, S'n)
Latham, Michael


Clark, Sir W. (Croydon S)
Lawrence, Ivan


Clarke, Kenneth (Rushcliffe)
Lawsone, Rt Hon Nigel


Cockeram, Eric
Lee, John


Cope, John
Lennox-Boyd, Hon Mark


Corrie, John
Lester, Jim (Beeston)


Costain, Sir Albert
Lewis, Kenneth (Rutland)


Cranborne, Viscount
Lloyd, Peter (Fareham)


Crouch, David
Loveridge, John


Dean, Paul (North Somerset)
Luce, Richard


Dickens, Geoffrey
McCrindle, Robert


Dorrell, Stephen
McCusker, H.


Douglas-Hamilton, Lord J.
MacGregor, John


Dover, Denshore
MacKay, John (Argyll)


du Cann, Rt Hon Edward
Macmillan, Rt Hon M.


Durant, Tony
McNair-Wilson, M. (N'bury)


Dykes, Hugh
McNair-Wilson, P. (New F'st)


Eden, Rt Hon Sir John
McQuarrie, Albert


Eggar, Tim
Madel, David


Fairbairn, Nicholas
Major, John


Faith, Mrs Sheila
Marland, Paul


Farr, John
Marlow, Tony


Fenner, Mrs Peggy
Marshall, Michael (Arundel)


Finsberg, Geoffrey
Maude, Rt Hon Sir Angus


Fisher, Sir Nigel
Mawby, Ray


Fletcher, A. (Ed'nb'gh N)
Mawhinney, Dr Brian


Fletcher-Cooke, Sir Charles
Mayhew, Patrick


Fookes, Miss Janet
Meyer, Sir Anthony


Forman, Nigel
Miller, Hal (B'grove)


Fowler, Rt Hon Norman
Mills, Iain (Meriden)


Fox, Marcus
Mills, Peter (West Devon)


Fraser, Peter (South Angus)
Moate, Roger


Fry, Peter
Molyneaux, James


Gardiner, George (Reigate)
Monro, Hector


Garel-Jones, Tristan
Montgomery, Fergus


Glyn, Dr Alan
Moore, John


Goodlad, Alastair
Morgan, Geraint


Gorst, John
Morris, M. (N'hampton S)


Gow, Ian
Morrison, Hon C. (Devizes)


Gower, Sir Raymond
Morrison, Hon P. (Chester)


Grant, Anthony (Harrow C)
Mudd, David


Gray, Hamish
Murphy, Christopher


Greenway, Harry
Neale, Gerrard


Griffiths, E. (B'y St. Edm'ds)
Needham, Richard


Griffiths, Peter Portsm'th N)
Nelson, Anthony


Grist, Ian
Neubert, Michael


Grylls, Michael
Newton, Tony


Gummer, John Selwyn
Onslow, Cranley






Oppenheim, Rt Hon Mrs S.
Stevens, Martin


Osborn, John
Stewart, Ian (Hitchin)


Page, Rt Hon Sir G. (Crosby)
Stewart, A.(E Renfrewshire)


Page, Richard (SW Herts)
Stokes, John


Parris, Matthew
Stradling Thomas, J.


Patten, Christopher (Bath)
Taylor, Teddy (S'end E)


Pawsey, James
Temple-Morris, Peter


Percival, Sir Ian
Thatcher, Rt Hon Mrs M.


Pink, R. Bonner
Thomas, Rt Hon Peter


Pollock, Alexander
Thompson, Donald


Porter, Barry
Thorne, Neil (Ilford South)


Powell, Rt Hon J.E. (S Down)
Thornton, Malcolm


Price, Sir David (Eastleigh)
Townend, John (Bridlington)


Proctor, K. Harvey
Townsend, Cyril D, (B'heath)


Pym, Rt Hon Francis
Trippier, David


Raison, Timothy
Trotter, Neville


Rathbone, Tim
van Straubenzee, W. R.


Rees-Davies, W. R.
Vaughan, Dr Gerard


Renton, Tim
Viggers, Peter


Rhodes James, Robert
Waddington, David


Rhys Williams, Sir Brandon
Wakeham, John


Rifkind, Malcolm
Waldegrave, Hon William


Roberts, Wyn (Conway)
Walker, B. (Perth)


Ross, Wm. (Londonderry)
Walker-Smith, Rt Hon Sir D.


Rossi, Hugh
Waller, Gary


Rost, Peter
Ward, John


Sainsbury, Hon Timothy
Warren, Kenneth


Scott, Nicholas
Watson, John


Shaw, Giles (Pudsey)
Wells, John (Maidstone)


Shelton, William (Streatham)
Wells, Bowen


Shepherd, Colin (Hereford)
Wheeler, John


Shepherd, Richard
Whitelaw, Rt Hon William


Shersby, Michael
Whitney, Raymond


Silvester, Fred
Wickenden, Keith


Sims, Roger
Wiggin, Jerry


Skeet, T. H. H.
Wilkinson, John


Smith, Dudley
Williams, D.(Montgomery)


Speed, Keith
Winterton, Nicholas


Speller, Tony
Wolfson, Mark


Spicer, Jim (West Dorset)
Young, Sir George (Acton)


Spicer, Michael (S Worcs)
Younger, Rt Hon George


Sproat, Iain



Squire, Robin
Tellers for the Noes:


Stanbrook, Ivor
Mr. Spencer Le Marchant and Mr. Carol Mather.


Steen, Anthony

Question accordingly negatived.

Question put, That the amendment be made:

The House divided: Ayes 170, Noes 255.

Division No. 142]
[11.55 am


AYES


Adams, Allen
Cunningham, G. (Islington S)


Alton, David
Dalyell, Tam


Anderson, Donald
Davidson, Arthur


Archer, Rt Hon Peter
Deakins, Eric


Ashton, Joe
Dean, Joseph (Leeds West)


Beith, A. J.
Dempsey, James


Benn, Rt Hon A. Wedgwood
Dewar, Donald


Bennett, Andrew (St'kp't N)
Dixon, Donald


Booth, Rt Hon Albert
Dormand, Jack


Bray, Dr Jeremy
Douglas, Dick


Brown, Hugh D. (Provan)
Dubs, Alfred


Brown, R. C. (N'castle W)
Duffy, A. E. P.


Brown, Ron (E'burgh, Leith)
Dunwoody, Hon Mrs G.


Brown, Ronald W. (H'ckn'y S)
Eadie, Alex


Callaghan, Rt Hon J.
Eastham, Ken


Callaghan, Jim (Midd't'n &amp; P)
Edwards, R. (Whampt'n S E)


Campbell, Ian
Ellis, R. (NE D'bysh're)


Campbell-Savours, Dale
Ellis, Tom (Wrexham)


Carmichael, Neil
English, Michael


Carter-Jones, Lewis
Ennals, Rt Hon David


Cartwright, John
Evans, Ioan (Aberdare)


Clark, Dr David (S Shields)
Field, Frank


Cocks, Rt Hon M. (B'stol S)
Fitt, Gerard


Coleman, Donald
Flannery, Martin


Cowans, Harry
Ford, Ben


Crowther, J. S.
Forrester, John


Cryer, Bob
Foster, Derek


Cunliffe, Lawrence
Freud, Clement





Garrett, John (Norwich S)
O'Halloran, Michael


Garrett, W. E. (Wallsend)
O'Neill, Martin


George, Bruce
Orme, Rt Hon Stanley


Gilbert, Rt Hon Dr John
Owen, Rt Hon Dr David


Golding, John
Pavitt, Laurie


Gorst, John
Pendry, Tom


Gourlay, Harry
Penhaligon, David


Graham, Ted
Powell, Raymond (Ogmore)


Grant, George (Morpeth)
Price, C. (Lewisham W)


Grimond, Rt Hon J.
Rees, Rt Hon M (Leeds S)


Hamilton, W. W. (C'tral Fife)
Richardson, Jo


Hardy, Peter
Roberts, Albert (Normanton)


Harrison, Rt Hon Walter
Robertson, George


Hart, Rt Hon Dame Judith
Robinson, G. (Coventry NW)


Hattersley, Rt Hon Roy
Rooker, J. W.


Haynes, Frank
Roper, John


Hogg, N. (E Dunb't'nshire)
Ross, Stephen (Isle of Wight)


Holland, S. (L'b'th, Vauxh'll)
Rowlands, Ted


Home Robertson, John
Sever, John


Homewood, William
Sheerman, Barry


Hooley, Frank
Sheldon, Rt Hon R.


Howells, Geraint
Shepherd, Richard


Huckfield, Les
Shore, Rt Hon Peter


Hudson Davies, Gwilym E.
Silkin, Rt Hon J. (Deptford)


Hughes, Mark (Durham)
Smith, Cyril (Rochdale)


Hughes, Robert (Aberdeen N)
Snape, Peter


Janner, Hon Greville
Soley, Clive


John, Brynmor
Spearing, Nigel


Johnson, James (Hull West)
Spriggs, Leslie


Johnston, Russell (Inverness)
Stallard, A. W.


Jones, Barry (East Flint)
Steel, Rt Hon David


Jones, Dan (Burnley)
Stewart, Rt Hon D. (W Isles)


Kaufman, Rt Hon Gerald
Stoddart, David


Kilroy-Silk, Robert
Stott, Roger


Kinnock, Neil
Strang, Gavin


Leadbitter, Ted
Straw, Jack


Leighton, Ronald
Summerskill, Hon Dr Shirley


Lewis, Ron (Carlisle)
Taylor, Mrs Ann (Bolton W)


Litherland, Robert
Thomas, Dr R.(Carmarthen)


Lofthouse, Geoffrey
Tilley, John


Lyons, Edward (Bradf'd W)
Tinn, James


Mabon, Rt Hon Dr J. Dickson
Urwin, Rt Hon Tom


McCartney, Hugh
Varley, Rt Hon Eric G.


McDonald, Dr Oonagh
Wainwright, E. (Dearne V)


McGuire, Michael (Ince)
Wainwright, R. (Colne V)


McKay, Allen (Penistone)
Watkins, David


MacKenzie, Rt Hon Gregor
Welsh, Michael


McNally, Thomas
White, Frank R.


McNamara, Kevin
White, J. (G'gow Pollok)


McTaggart, Robert
Whitehead, Phillip


McWilliam, John
Wigley, Dafydd


Magee, Bryan
Williams, Rt Hon A.(S'sea W)


Marshall, Dr Edmund (Goole)
Wilson, Gordon (Dundee E)


Martin, M (G'gow S'burn)
Winnick, David


Maxton, John
Young, David (Bolton E)


Millan, Rt Hon Bruce



Morris, Rt Hon C. (O'shaw)
Tellers for the Ayes:


Morton, George
Mr. James Hamilton and Mr. Austin Mitchell.


Moyle, Rt Hon Roland





NOES


Adley, Robert
Biggs-Davison, John


Alexander, Richard
Blackburn, John


Alison, Michael
Bonsor, Sir Nicholas


Ancram, Michael
Boscawen, Hon Robert


Arnold, Tom
Bottomley, Peter (W'wich W)


Aspinwall, Jack
Bowden, Andrew


Atkins, Rt Hon H.(S'thorne)
Boyson, Dr Rhodes


Atkins, Robert (Preston N)
Bright, Graham


Atkinson, David (B'm'th, E)
Brinton, Tim


Baker, Kenneth (St. M'bone)
Brittan, Leon


Baker, Nicholas (N Dorset)
Brooke, Hon Peter


Banks, Robert
Brotherton, Michael


Beaumont-Dark, Anthony
Brown, Michael (Brigg &amp; Sc'n)


Bendall, Vivian
Browne, John (Winchester)


Bennett, Sir Frederic (T'bay)
Bruce-Gardyne, John


Benyon, Thomas (A'don)
Bryan, Sir Paul


Benyon, W. (Buckingham)
Buck, Antony


Bevan, David Gilroy
Budgen, Nick


Biffen, Rt Hon John
Bulmer, Esmond






Butcher, John
Joseph, Rt Hon Sir Keith


Cadbury, Jocelyn
Kaberry, Sir Donald


Carlisle, John (Luton West)
Kershaw, Anthony


Carlisle, Kenneth (Lincoln)
King, Rt Hon Tom


Cartwright, John
Knight, Mrs Jill


Chalker, Mrs. Lynda
Knox, David


Channon, Rt. Hon. Paul
Lamont, Norman


Chapman, Sydney
Lang, Ian


Churchill, W. S.
Latham, Michael


Clark, Hon A. (Plym'th, S'n)
Lawrence, Ivan


Clark, Sir W. (Croydon S)
Lawson, Rt Hon Nigel


Clarke, Kenneth (Rushcliffe)
Lee, John


Cockeram, Eric
Lennox-Boyd, Hon Mark


Cope, John
Lester, Jim (Beeston)


Corrie, John
Lewis, Kenneth (Rutland)


Costain, Sir Albert
Lloyd, Peter (Fareham)


Cranborne, Viscount
Loveridge, John


Crouch, David
Luce, Richard


Dean, Paul (North Somerset)
McCusker, H.


Dickens, Geoffrey
MacGregor, John


Dorrell, Stephen
MacKay, John (Argyll)


Douglas-Hamilton, Lord J.
Macmillan, Rt Hon M.


Dover, Denshore
McNair-Wilson, M. (N'bury)


du Cann, Rt Hon Edward
McNair-Wilson, P. (New F'st)


Dunn, Robert (Dartford)
McQuarrie, Albert


Durant, Tony
Madel, David


Dykes, Hugh
Major, John


Eden, Rt Hon Sir John
Marland, Paul


Eggar, Tim
Marlow, Tony


Fairbairn, Nicholas
Marshall, Michael (Arundel)


Faith, Mrs Sheila
Maude, Rt Hon Sir Angus


Farr, John
Mawby, Ray


Fenner, Mrs Peggy
Mawhinney, Dr Brian


Finsberg, Geoffrey
Mayhew, Patrick


Fisher, Sir Nigel
Meyer, Sir Anthony


Fletcher, A. (Ed'nb'gh N)
Miller, Hal (B'grove)


Fletcher-Cooke, Sir Charles
Mills, Iain (Meriden)


Fookes, Miss Janet
Mills, Peter (West Devon)


Forman, Nigel
Moate, Roger


Fowler, Rt Hon Norman
Molyneaux, James


Fox, Marcus
Monro, Hector


Fraser, Peter (South Angus)
Montgomery, Fergus


Fry, Peter
Moore, John


Gardiner, George (Reigate)
Morgan, Geraint


Garel-Jones, Tristan
Morris, M. (N'hampton S)


Glyn, Dr Alan
Morrison, Hon C. (Devizes)


Goodlad, Alastair
Morrison, Hon P. (Chester)


Gow, Ian
Mudd, David


Gower, Sir Raymond
Murphy, Christopher


Grant, Anthony (Harrow C)
Neale, Gerrard


Gray, Hamish
Needham, Richard


Greenway, Harry
Nelson, Anthony


Griffiths, E.(B'y St. Edm'ds)
Neubert, Michael


Griffiths, Peter Portsm'th N)
Newton, Tony


Grist, Ian
Onslow, Cranley


Grylls, Michael
Oppenheim, Rt Hon Mrs S.


Gummer, John Selwyn
Osborn, John


Hamilton, Hon A.
Page, Rt Hon Sir G. (Crosby)


Hamilton, Michael (Salisbury)
Page, Richard (SW Herts)


Hampson, Dr Keith
Parris, Matthew


Hannam,John
Patten, Christopher (Bath)


Haselhurst, Alan
Pawsey, James


Hastings, Stephen
Percival, Sir Ian


Havers, Rt Hon Sir Michael
Pink, R. Bonner


Hawkins, Paul
Pollock, Alexander


Hawksley, Warren
Porter, Barry


Heddle, John
Powell, Rt Hon J.E. (S Down)


Henderson, Barry
Price, Sir David (Eastleigh)


Heseltine, Rt Hon Michael
Proctor, K. Harvey


Hicks, Robert
Pym, Rt Hon Francis


Hill, James
Raison, Timothy


Hogg, Hon Douglas (Gr'th'm)
Rathbone, Tim


Hooson, Tom
Rees-Davies, W. R.


Howe, Rt Hon Sir Geoffrey
Renton, Tim


Howell, Rt Hon D. (G'ldf'd)
Rhodes James, Robert


Howell, Ralph (N Norfolk)
Rifkind, Malcolm


Hunt, David (Wirral)
Roberts, Wyn (Conway)


Jenkin, Rt Hon Patrick
Ross, Wm. (Londonderry)


Jessel, Toby
Rossi, Hugh


Jopling, Rt Hon Michael
Rost, Peter





Sainsbury, Hon Timothy
Trippier, David


Scott, Nicholas
Trotter, Neville


Shaw, Giles (Pudsey)
van Straubenzee, W. R.


Shelton, William (Streatham)
Vaughan, Dr Gerard


Shepherd, Colin (Hereford)
Viggers, Peter


Shersby, Michael
Waddington, David


Silvester, Fred
Wakeham, John


Sims, Roger
Waldegrave, Hon William


Smith, Dudley
Walker, B. (Perth)


Speed, Keith
Walker-Smith, Rt Hon Sir D.


Speller, Tony
Waller, Gary


Spicer, Jim (West Dorset)
Ward, John


Spicer, Michael (S Worcs)
Warren, Kenneth


Sproat, Iain
Watson, John


Stanbrook, Ivor
Wells, John (Maidstone)


Stanley, John
Wells, Bowen


Steen, Anthony
Wheeler, John


Stevens, Martin
Whitelaw, Rt Hon William


Stewart, Ian (Hitchin)
Whitney, Raymond


Stewart, A.(E Renfrewshire)
Wickenden, Keith


Stokes, John
Wiggin, Jerry


Stradling Thomas, J.
Wilkinson, John


Taylor, Teddy (S'end E)
Williams, D.(Montgomery)


Temple-Morris, Peter
Winterton, Nicholas


Thatcher, Rt Hon Mrs M.
Wolfson, Mark


Thomas, Rt Hon Peter
Young, Sir George (Acton)


Thompson, Donald
Younger, Rt Hon George


Thorne, Neil (Ilford South)



Thornton, Malcolm
Tellers for the Noes:


Townend, John (Bridlington)
Mr. Spencer Le Marchart and Mr. Carol Mather 


Townsend, Cyril D, (B'heath)

Question accordingly negatived

Amendment proposed: No. 53, in page 39, line 36, leave out clause 47.—[Mr. Michael Marshal.]

Question put, That the amendment be made:—

The House divided: Ayes 262, Noes 175.

Division No. 143]
[12.07 pm


AYES


Adley, Robert
Burden, Sir Frederick


Alexander, Richard
Butcher, John


Alison, Michael
Cadbury, Jocelyn


Ancram, Michael
Carlisle, John (Luton West)


Arnold, Tom
Carlisle, Kenneth (Lincoln)


Aspinwall, Jack
Chalker, Mrs. Lynda


Atkins, Rt Hon H.(S'thorne)
Channon, Rt. Hon. Paul


Atkins, Robert (Preston N)
Chapman, Sydney


Atkinson, David (B'm'th, E)
Churchill, W. S.


Baker, Kenneth (St. M'bone)
Clark, Sir W. (Croydon S)


Baker, Nicholas (N Dorset)
Clarke, Kenneth (Rushcliffe)


Banks, Robert
Cockeram, Eric


Beaumont-Dark, Anthony
Corrie, John


Bendall, Vivian
Costain, Sir Albert


Bennett, Sir Frederic (T'bay)
Cranborne, Viscount


Benyon, Thomas (A'don)
Critchley, Julian


Benyon, W. (Buckingham)
Crouch, David


Bevan, David Gilroy
Dean, Paul (North Somerset)


Biffen, Rt Hon John
Dickens, Geoffrey


Biggs-Davison, John
Dorrell, Stephen


Blackburn, John
Douglas-Hamilton, Lord J.


Bonsor, Sir Nicholas
Dover, Denshore


Boscawen, Hon Robert
du Cann, Rt Hon Edward


Bottomley, Peter (W'wich W)
Dunn, Robert (Dartford)


Bowden, Andrew
Durant, Tony


Boyson, Dr Rhodes
Dykes, Hugh


Braine, Sir Bernard
Eden, Rt Hon Sir John


Bright, Graham
Eggar, Tim


Brinton, Tim
Fairbairn, Nicholas


Brittan, Leon
Faith, Mrs Sheila


Brooke, Hon Peter
Farr, John


Brotherton, Michael
Fenner, Mrs Peggy


Brown, Michael (Brigg &amp; Sc'n)
Finsberg, Geoffrey


Browne, John (Winchester)
Fisher, Sir Nigel


Bruce-Gardyne, John
Fletcher, A. (Ed'nb'gh N)


Bryan, Sir Paul
Fletcher-Cooke, Sir Charles


Buck, Antony
Fookes, Miss Janet


Budgen, Nick
Forman, Nigel


Bulmer, Esmond
Fowler, Rt Hon Norman






Fox, Marcus
Miller, Hal (B'grove)


Fraser, Peter (South Angus)
Mills, Iain (Meriden)


Fry, Peter
Mills, Peter (West Devon)


Gardiner, George (Reigate)
Moate, Roger


Garel-Jones, Tristan
Molyneaux, James


Glyn, Dr Alan
Monro, Hector


Goodlad, Alastair
Montgomery, Fergus


Gorst, John
Moore, John


Gow, Ian
Morgan, Geraint


Gower, Sir Raymond
Morris, M. (N'hampton S)


Grant, Anthony (Harrow C)
Morrison, Hon C. (Devizes)


Gray, Hamish
Morrison, Hon P. (Chester)


Greenway, Harry
Mudd, David


Griffiths, E.(B'y St. Edm'ds)
Murphy, Christopher


Griffiths, Peter Portsm'th N)
Neale, Gerrard


Grist, Ian
Needham, Richard


Grylls, Michael
Nelson, Anthony


Gummer, John Selwyn
Neubert, Michael


Hamilton, Hon A.
Newton, Tony


Hamilton, Michael (Salisbury)
Onslow, Cranley


Hampson, Dr Keith
Oppenheim, Rt Hon Mrs S.


Hannam, John
Osborn, John


Haselhurst, Alan
Page, Rt Hon Sir G. (Crosby)


Hastings, Stephen
Page, Richard (SW Herts)


Havers, Rt Hon Sir Michael
Parris, Matthew


Hawkins, Paul
Patten, Christopher (Bath)


Hawksley, Warren
Pawsey, James


Heddle, John
Percival, Sir Ian


Henderson, Barry
Pink, R. Bonner


Heseltine, Rt Hon Michael
Pollock, Alexander


Hicks, Robert
Porter, Barry


Hill, James
Price, Sir David (Eastleigh)


Hogg, Hon Douglas (Gr'th'm)
Proctor, K. Harvey


Hooson, Tom
Pym, Rt Hon Francis


Howe, Rt Hon Sir Geoffrey
Raison, Timothy


Howell, Rt Hon D. (G'ldf'd)
Rathbone, Tim


Howell, Ralph (N Norfolk)
Rees-Davies, W. R.


Hunt, David (Wirral)
Renton, Tim


Jenkin, Rt Hon Patrick
Rhodes James, Robert


Jessel, Toby
Rhys Williams, Sir Brandon


Jopling, Rt Hon Michael
Ridley, Hon Nicholas


Joseph, Rt Hon Sir Keith
Rifkind, Malcolm


Kaberry, Sir Donald
Roberts, Wyn (Conway)


Kellett-Bowman, Mrs Elaine
Rossi, Hugh


Kershaw, Anthony
Rost, Peter


King, Rt Hon Tom
Sainsbury, Hon Timothy


Knight, Mrs Jill
Scott, Nicholas


Knox, David
Shaw, Giles (Pudsey)


Lamont, Norman
Shelton, William (Streatham)


Lang, Ian
Shepherd, Colin (Hereford)


Latham, Michael
Shersby, Michael


Lawrence, Ivan
Silvester, Fred


Lawson, Rt Hon Nigel
Sims, Roger


Lee, John
Smith, Dudley


Lennox-Boyd, Hon Mark
Speed, Keith


Lester, Jim (Beeston)
Speller, Tony


Lewis, Kenneth (Rutland)
Spicer, Jim (West Dorset)


Lloyd, Peter (Fareham)
Spicer, Michael (S Worcs)


Loveridge, John
Sproat, Iain


Luce, Richard
Squire, Robin


McCrindle, Robert
Stanbrook, Ivor


McCusker, H.
Stanley, John


MacGregor, John
Steen, Anthony


MacKay, John (Argyll)
Stevens, Martin


Macmillan, Rt Hon M.
Stewart, Ian (Hitchin)


McNair-Wilson, M. (N'bury)
Stewart, A. (E Renfrewshire)


McNair-Wilson, P. (New F'st)
Stokes, John


McQuarrie, Albert
Stradling Thomas, J.


Madel, David
Taylor, Teddy (S'end E)


Major, John
Temple-Morris, Peter


Marland, Paul
Thatcher, Rt Hon Mrs M.


Marlow, Tony
Thomas, Rt Hon Peter


Marshall, Michael (Arundel)
Thompson, Donald


Mates, Michael
Thorne, Neil (Ilford South)


Mather, Carol
Thornton, Malcolm


Maude, Rt Hon Sir Angus
Townend, John (Bridlington)


Mawby, Ray
Townsend, Cyril D, (B'heath)


Mawhinney, Dr Brian
Trippier, David


Mayhew, Patrick
Trotter, Neville


Meyer, Sir Anthony
van Straubenzee, W. R.





Vaughan, Dr Gerard
Whitelaw, Rt Hon William


Viggers, Peter
Whitney, Raymond


Waddington, David
Wickenden, Keith


Wakeham, John
Wiggin, Jerry


Waldegrave, Hon William
Wilkinson, John


Walker, B. (Perth)
Williams, D.(Montgomery)


Walker-Smith, Rt Hon Sir D.
Winterton, Nicholas


Waller, Gary
Wolfson, Mark


Ward, John
Young, Sir George (Acton)


Warren, Kenneth
Younger, Rt Hon George


Watson, John



Wells, John (Maidstone)
Tellers for the Ayes:


Wells, Bowen
Mr. Spencer le Marchant and Mr. John Cope.


Wheeler, John





NOES


Adams, Allen
Graham, Ted


Alton, David
Grant, George (Morpeth)


Anderson, Donald
Hamilton, James (Bothwell)


Archer, Rt Hon Peter
Hamilton, W. W. (C'tral Fife)


Ashton, Joe
Hardy, Peter


Beith, A. J.
Harrison, Rt Hon Walter


Benn, Rt Hon A. Wedgwood
Hart, Rt Hon Dame Judith


Bennett, Andrew (St'kp't N)
Hattersley, Rt Hon Roy


Booth, Rt Hon Albert
Haynes, Frank


Bradley, Tom
Heffer, Eric S.


Bray, Dr Jeremy
Hogg, N. (E Dunb't'nshire)


Brown, Hugh D. (Provan)
Holland, S. (L'b'th, Vauxhll)


Brown, R. C. (N'castle W)
Home Robertson, John


Brown, Ron (E'burgh, Leith)
Homewood, William


Brown, Ronald W. (H'ckn'y S)
Hooley, Frank


Callaghan, Rt Hon J.
Howells, Geraint


Callaghan, Jim (Midd't'n &amp; P)
Huckfield, Les


Campbell, Ian
Hudson Davies, Gwilym E.


Campbell-Savours, Dale
Hughes, Robert (Aberdeen N)


Carmichael, Neil
Janner, Hon Greville


Carter-Jones, Lewis
John, Brynmor


Cartwright, John
Johnson, James (Hull West)


Clark, Dr David (S Shields)
Johnston, Russell (Inverness)


Cocks, Rt Hon M. (B'stol S)
Jones, Barry (East Flint)


Coleman, Donald
Jones, Dan (Burnley)


Cook, Robin F.
Kaufman, Rt Hon Gerald


Cowans, Harry
Kilroy-Silk, Robert


Crowther, J. S.
Kinnock, Neil


Cryer, Bob
Lead bitter, Ted


Cunliffe, Lawrence
Leighton, Ronald


Cunningham, G. (Islington S)
Lewis, Ron (Carlisle)


Dalyell, Tam
Litherland, Robert


Davidson, Arthur
Lofthouse, Geoffrey


Deakins, Eric
Lyons, Edward (Bradf'd W)


Dean, Joseph (Leeds West)
Mabon, Rt Hon Dr J. Dickson


Dempsey, James
McDonald, Dr Oonagh


Dewar, Donald
McElhone, Frank


Dixon, Donald
McKay, Allen (Penistone)


Dormand, Jack
McKelvey, William


Douglas, Dick
MacKenzie, Rt Hon Gregor


Dubs, Alfred
McNally, Thomas


Duffy, A. E. P.
McNamara, Kevin


Dunwoody, Hon Mrs G.
McTaggart, Robert


Eadie, Alex
McWilliam, John


Eastham, Ken
Magee, Bryan


Edwards, R. (W'hampt'n S E)
Marshall, Dr Edmund (Goole)


Ellis, R. (NE D'bysh're)
Marshall, Jim (Leicester S)


Ellis, Tom (Wrexham)
Martin, M (G'gow S'burn)


English, Michael
Maxton, John


Evans, Ioan (Aberdare)
Mikardo, Ian


Evans, John (Newton)
Millan, Rt Hon Bruce


Field, Frank
Mitchell, Austin (Grimsby)


Fitt, Gerard
Morris, Rt Hon C. (O'shaw)


Flannery, Martin
Morton, George


Fletcher, Ted (Darlington)
Moyle, Rt Hon Roland


Ford, Ben
O'Halloran, Michael


Forrester, John
O'Neill, Martin


Foster, Derek
Orme, Rt Hon Stanley


Freud, Clement
Owen, Rt Hon Dr David


Garrett, John (Norwich S)
Pavitt, Laurie


Garrett, W. E. (Wallsend)
Pendry, Tom


George, Bruce
Penhaligon, David


Gilbert, Rt Hon Dr John
Powell, Raymond (Ogmore)


Gourlay, Harry
Price, C. (Lewisham W)






Race, Reg
Straw, Jack


Richardson, Jo
Summerskill, Hon Dr Shirley


Roberts, Albert (Normanton)
Taylor, Mrs Ann (Bolton W)


Robertson, George
Thomas, Dr R. (Carmarthen)


Robinson, G. (Coventry NW)
Thorne, Stan (Preston South)


Rooker, J. W.
Tilley, John


Roper, John
Urwin, Rt Hon Tom


Ross, Ernest (Dundee West)
Varley, Rt Hon Eric G.


Ross, Stephen (Isle of Wight)
Wainwright, E.(Dearne V)


Rowlands, Ted
Wainwright, R.(Colne V)


Sever, John
Watkins, David


Sheerman, Barry
Welsh, Michael


Sheldon, Rt Hon R.
White, Frank R.


Shepherd, Richard
White, J. (G'gow Pollok)


Silkin, Rt Hon J. (Deptford)
Whitehead, Phillip


Skinner, Dennis
Wigley, Dafydd


Smith, Cyril (Rochdale)
Williams, Rt Hon A.(S'sea W)


Snape, Peter
Wilson, Gordon (Dundee E)


Soley, Clive
Winnick, David


Spearing, Nigel
Woodall, Alec


Spriggs, Leslie
Young, David (Bolton E)


Stallard, A. W.



Steel, Rt Hon David
Tellers for the Noes:


Stoddart, David
Mr. Hugh McCartney and Mr. James Tinn.


Stott, Roger



Strang, Gavin

Question accordingly agreed to.

Clause 50

DOCUMENTARY EVIDENCE AS TO SUMS DUE FOR SERVICES

Mr. Henderson: I beg to move amendment No. 55, in page 42, line 21, leave out 'conclusive evidence' and insert
'evidence (and, in Scotland, sufficient evidence)'.
This is one of a pair of amendments that were moved in Committee. The twin of this amendment was written into the Bill as paragraph 51(4) of schedule 3.
The purpose of the amendment is to prevent the situation occurring in which a certificate of the corporation could be conclusive evidence as to the rate at which a charge might be levied by an authority outside the British Isles and to that extent could not be challenged in a court. The object of the amendment, therefore, is to provide that whilst a certificate of the corporation in these circumstances would be valid evidence it would not be the end of the story and it could be challenged in a court.

Mr. Mikardo: This amendment arises out of an initiative that the hon. Member for Fife, East (Mr. Henderson) and I took independently of each other and unbeknown to each other in the course of the proceedings in the Standing Committee—an excellent example of great minds thinking alike. I am much indebted to him for the way in which he moved the amendment. I have nothing to add to what he said, except to express the hope that the Government will look with a benign countenance upon it.

Mr. Marshall: I have to say straight away that in view of the persuasiveness of my hon. Friend the Member for Fife, East (Mr. Henderson) when he moved the amendment in Committee we undertook to consult the Post Office on the implications of accepting it. As we told the Committee then, when accepting a similar amendment in relation to the Post Office, the Post Office sees no significant difficulty in a British Telecommunications certificate of rates abroad being evidence, or sufficient evidence in Scotland, instead of conclusive evidence.
Therefore, in view of the renewed persuasiveness of my hon. Friend and the apparently intuitive skill o' the hon. Member for Bethnal Green and Bow (Mr. Mikardo), I am happy to accept the amendment, which will effect a small but worthwhile improvement in the rights of BT's customers.

Amendment agreed to.

Clause 54

POWER OF MANAGERS OF CERTAIN WELFARE FUNDS TO PRESERVE THEIR SCOPE

Amendment made: No. 56, in page 43, line 13, leave out clause 54.—[Mr. Kenneth Baker.]

Clause 55

INTERPRETATION AND EXTENT OF PART I

Amendment made: No. 57, in page 45, line 22, at end insert—
'"telecommunic ation system' shall be construed in accordance with section 12(1).'.—[Mr. Kenneth Baker.]

Clause 56

POWERS OF THE POST OFFICE

Amendment made: No. 58, in page 47, line 25, leave out 'definition' and insert
'definitions—" `telecommunication system' shall be construed in accordance with section 12(1) of the British Telecommunications Act 1981; '."—[Mr. Kenneth Baker.]

Clause 58

REDISTRIBUTION OF FUNCTIONS AMONG WHOLLY OWNED SUBSIDIARIES

Amendment made: No. 115, in page 49, line 4, leave out from beginning to end of line 8.—[Mr. Kenneth Baker.]

Clause 59

CONTROL OF WHOLLY OWNED SUBSIDIARIES

Amendment made: No. 60, in page 50, line 22, at end insert—
'(4) As regards any wholly owned subsidiary of the Post Office, the Post Office shall secure that the subsidiary seeks consultation with any organisation appearing to the subsidiary to be appropriate with a view to the conclusion between it and that organisation of such agreements as appear to the parties to be desirable with respect to the establishment and maintenance of machinery for—

(a) the settlement of terms and conditions of employment of persons employed by the subsidiary;
(b) the promotion and encouragement of measures affecting efficiency in the carrying on by the subsidiary of its activities, including, in particular, the promotion and encouragement of the training of persons employed by the subsidiary; and
(c) the promotion and encouragement of measures affecting the safety, health and welfare of persons employed by the subsidiary.'.—[Mr. Kenneth Baker.]

Clause 60

GENERAL CONTROL AND SUPERVISION BY THE SECRETARY OF STATE

Amendments made: No. 116, in page 51, line 1, leave out 'British Telecommunications Act' and insert 'said Act of.

No. 117, in page 51, line 7, leave out 'subsection' and insert 'subsections'.

No. 118, in page 51, line 10, leave out from beginning to `to' in line 12 and insert—

'(a) to make a scheme under subsection (1) of section 58 of the said Act of 1981, or to exercise its powers under subsection (4) of that section, for such purposes and in such manner as may be specified in the direction; or
(b) to dispose of any part of its undertaking or any assets held by it or'.

No. 119, in page 51, line 17, leave out 'this subsection' and insert 'paragraph (b) above'.

No. 120, in page 51, line 19, leave out 'British Telecommunications Act' and insert 'said Act of'.

No. 121, in page 51, line 20, at end insert—
'(5A) The Secretary of State shall lay before each House of Parliament a copy of every direction given under subsection (5) above unless he is of opinion that disclosure of the direction is against—

(a) the interests of national security; or
(b) the commercial interests of any person.

(3A) In subsection (6) of that section—
(a) for the word "directions" there shall be substituted the word "direction"; and
(b) for the words "it is against the interests of national security to do so" there shall be substituted the words "disclosure of the direction is against—

(a) the interests of national security; or
(b) the commercial interests of a person other than the Post Office and its wholly owned subsidiaries."'.

No. 122, in page 51, line 37, at end insert—
'(6A) In subsection (11) of that section—
(a) for the word "section" there shall be substituted the words "Part of this Act or Part II of the said Act of 1981";
(b) for the words "subsection (6) above" there shall be substituted the words "subsection (6)(a) above"'.—[Mr. Kenneth Baker.]

Clause 64

EXCLUSIVE PRIVILEGE OF THE POST OFFICE WITH RESPECT TO THE CONVEYANCE ETC. OF LETTERS

Mr. Charles R. Morris: I beg to move amendment No. 66, in page 54, line 24, leave out from 'addressee' to end of line 26.
This is a minor amendment. It is not my intention to detain the House at any great length. The purpose of the amendment is to ensure that the delivery of hard copy transmitted by telecommunications as part of an electronic mail service will be covered by the postal monopoly.
I am informed that the Post Office board itself is equally concerned about the amendment and I am anxious that the Minister should respond favourably to it.
The first and most obvious point about the amendment is that there is no need for the Government to take a decision now about this matter. I suggest that it would be preferable for the Government to monitor developments and to take suitable action later if required. Let us suppose that it was decided that it would be desirable for the hard copy to be delivered either by telecommunications staff or

by private operator. There would then be power under clause 66 to grant a licence specifically for that purpose. To that extent clause 64(5)(c) is unnecessary. There are more serious arguments against it as well, for it chips away at the basic letter monopoly, potentially damaging the viability of the letter service.
There is no question of the postal service gaining the monopoly of electronic mail at all stages of its progress through the system, if only because transmission by electronic means lies fairly and squarely within the British Telecommunications monopoly under clause 12. However, transmission is likely to be dependent on British Telecommunications' purchasing service by payment for circuits just like any other licensee. For these reasons, I hope that the Minister will accept the amendment.

Mr. Kenneth Baker: I have listened carefully to the arguments advanced by the right hon. Member for Manchester, Openshaw (Mr. Morris) as I did in Committee. However, I continue to believe that giving the Post Office the exclusive privilege over the delivery of hard-copy electronic mail could act as a serious deterrent to the development of this important new form of communication. As I said in Committee, we must remember that it will be not only the Post Office that will provide electronic mail services that involve a hard copy stage.
Under clause 15 the Secretary of State will be able to issue licences to private operators to run these services. If we were to allow the amendment those private operators would be faced with a situation where, although they could transmit messages electonically from one end of the country to the other, they would not be able to deliver those messages physically to their final destination but would be dependent for that on the Post Office. The amendment would even prevent the delivery to third parties of telex messages, and this now happens.
The right hon. Gentleman has argued that the Post Office will lose possibly as much as 25 per cent. of its traffic if its monopoly is not extended in this way. That need not necessarily be so. The Post Office already has a nation-wide network for the delivery of mail and thus has a distinct advantage over any potential competitors in this area. It should not therefore fear that competition but should be able to meet it.
The right hon. Gentleman argued once again that it was not necessary for us to exclude hard-copy electronic mail from the monopoly now, because we could use the powers under clauses 66 and 67 to license private operators or to suspend the monopoly if the Post Office service proved to be inadequate. I cannot agree. I am sure that if we were to take that line and to give the Post Office the monopoly over the delivery of hard-copy electronic mail, private operators would be deterred from setting up that sort of electronic mail service. As a result there would be little or no call on the Post Office service in this respect and we would therefore never be able to judge its adequacy.
As I said in Committee, I have not taken this decision lightly. I have considered it very carefully and I remain firmly of the view that to give the Post Office the monopoly over the delivery of hard-copy electronic mail would have a potentially very damaging effect on that extremely important new form of communication. I must therefore ask my hon. Friends to resist the amendment.

Amendment negatived.

Clause 65

GENERAL CLASSES OF ACTS NOT INFRINGING THE POSTAL PRIVILEGE

Mr. Charles R. Morris: I beg to move amendment No. 67, in page 54, line 38, leave out from beginning to end of line 38 on page 56 and insert:
The privilege conferred by section 64(1) can be waived by the Post Office with the consent of, or in accordance with a general authority given by, the Secretary of State, and is not infringed by section 3(2) of the 1953 Act.".

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this, it will be convenient to take the following amendments:
No. 69 in page 57, line 31, leave out clause 67.
No. 91, in schedule 6, page 125, line 21, column 3 leave out "3" and insert "3(1), 3(3) and 3(4)".

Mr. Morris: This series of amendments deals with delegations from the postal monopoly. Before dealing with the individual amendments as such, it might be helpful if I dealt generally with the breach of the postal monopoly, as envisaged by the Government in the Bill.
It is incumbent on me to remind the House that the postal monopoly has existed for 300 years. Few if any other countries in the world have breached their postal monopolies in the way which is envisaged in the Bill. In breaching the monopoly, the Government are running counter to the advice of the Select Committee on Nationalised Industries and to the considered view of the Carter committee, and are in opposition to the views of the board of the Post Office, the Post Office Users' National Council, the Council of Post Office Unions and the House. All those institutions and organisations are on record as being in favour of continuing the present postal monopoly. Because of political ideology or liberalisation—call it what you will—the Government are seeking to open up the postal monopoly. The losers in the long run will be the residents in rural areas, who will be sacrificed so that the postal pirates will survive.
One knows what will happen when the postal monopoly is breached. During the seven-week Post Office strike in 1972, an Old Etonian called Tony Randall established his own postal service, which was called Randall's private postal service. He charged 15s for a letter. What happened to those letters? One needs only to look at the headlines in the newspapers at that time, which emerged once Randall's private postal service got hold of the mail for delivery. The headlines in The Daily Telegraph and the Daily Mail at that time were:
Private Postal Service in Chaos.
12.30 pm
What happened when the strike was over? An unmarked van arrived outside the post office in Bedford and unloaded a number of mailbags containing letters which had been entrusted to Randall's private postal service. The postmen who had been on strike for seven weeks found themselves after the strike having to deal with letters which had been accepted by Randall's private postal service.

Mr. Mikardo: And paid for.

Mr. Morris: And paid for by those who had entrusted their mail to that service.
The Minister may argue that that was an aberration and that the situation was difficult. It is interesting that the

Secretary of State is taking powers to breach the Post Office postal monopoly at times of industrial difficulties. I cannot think of anything more calculated to exacerbate industrial relations between Post Office management and staff than for the Secretary of State to breach the postal monopoly.
If the Secretary of State breaches the postal monopoly the public will believe that letters sent via a private postal service will be guaranteed by the Government. That is what may happen as a result of these proposals.
I accept that there were difficulties in the Post Office in 1979. The traditional high standard of "day after" delivery had fallen appreciably. That is a fact. But one is obliged to ask: why did the quality and standard of postal services deteriorate in 1979? One has only to look at the history and the statistics in 1979. The London postal service was short of 10,000 staff. That situation precipitated the difficulties and was the harbinger of these proposals. I submit that there is no justification for any breaching of the postal monopoly as such.
There is one feature of any breach of the monopoly about which I am concerned. The effect of clause 65(1)(d) is to legalise the sending of letters abroad by international couriers. It is not clear why the Government accepted that addition as an amendment to the Bill in Committee.
The Government have already declared that they will use their powers to suspend the monopoly under clause 67 to allow couriers to convey time-sensitive and valuable mail provided that a minimum fee is paid. In Committee the Minister referred to a minimum of £1. I hope that that is maintained. If air courier services contract for a large volume of mail, I hope that they will not be allowed to provide those services for less than the minimum to which I have drawn attention. Derogations from the Post Office to international air couriers might precipitate difficulties with postal administrations in countries where derogations from the postal monopoly are not allowed.
I believe that any breach of the postal monopoly should be authorised by the Post Office and not by the Secretary of State.
My amendments seek to restore that power to the Post Office and deny it to the Secretary of State. This is a major issue relating to the provision of postal services to the community. I hope that the House will accept the amendments.

Mr. Peter Hardy: I shall endeavour to be brief. The House will be aware that I am interested in rural areas. Many hon. Members may associate my constituency with steel and coal, but it has within it many small villages, tiny hamlets and isolated dwellings. If my right hon. Friend's wise and sensible amendments are not accepted I fear that the rural areas of England, Scotland and Wales will be grossly disadvantaged.
Many Conservative Members may spend their holidays in Corfu or even more glamorous places, where the sun shines all the time. Some Labour Members, and perhaps even one or two Conservative Members, may prefer to spend their holidays in the sparsely populated areas of the British Isles. If they are familiar with those small communities and sparsely populated districts they will recognise that the postal service is of enormous importance. Everyone knows the postman.
Everyone living in such areas is probably also familiar with the fact that they are subsidised by the densely populated areas where the Post Office does not incur the


same cost. I think of friends who live in isolated parts of my constituency, and I can think of other friends who live in the far North of Scotland. Every time the postman calls his visit is being subsidised by perhaps £1, given the distances involved, and that money is provided by the postal services in London and the other conurbations.
It is ridiculous for us to expect that even the least competent entrepreneur in the private sector would eagerly volunteer to take over responsibility for delivering the post in Caithness and Sutherland or even in the less densely populated parts of England. I am sure that even Ministers would not expect a foolish business man to be involved in that traffic. They know very well that the people who wish the Bill to go through in its present form are not concerned with the rural areas of England. They are concerned with the dense, perhaps commercial, traffic that may travel only a quarter of a mile or half a mile in London, or may travel between London and the other metropolitan areas of England.
The Government should show a greater sympathy with the rural areas. After all, in election after election they purport to represent the interests of those areas. They should begin to consider what they have done to them.
In many parts of Britain there is scarcely any public transport. In many parts small shopkeepers have gone out of business because of the bureaucracies and financial impositions imposed upon them by the Government. They now see a prospect not merely of a diminution in the standards of the postal delivery and collection service but of an enormous extra increase in the charges involved.
The extra 20p on petrol is but one example of the Government's infliction of hardship on those areas. The national interest and the interests of those who have always voted Conservative but may never do so again suggest that the Government should look at the matter afresh.
There are not many Conservative Members in the Chamber at present. [HON. MEMBERS: "What about the Labour Benches?"] I accept that at the general election a number of my good friends lost their seats in county and rural areas. The electorate in those districts was perhaps conned into imagining that it would get a better deal from a Conservative Administration than it enjoyed under Labour. Astonishingly, even the farmers may have voted Conservative.
I see my hon. Friend the Member for Berwick and East Lothian (Mr. Home Robertson) expressing approval of what he knows I am about to say. Even the farmers in the United Kingdom were persuaded to vote Conservative at the last general election. A small number of the 256 farmers in my constituency voted for me. Perhaps more will do so next time. Farm incomes have not kept pace with inflation. Farmers in the United Kingdom currently enjoy an income 10 per cent. or 15 per cent. worse than they enjoyed when the Labour Government left office. They are not in a position to pay £1, £1·50 or £2 per postal item. If farmers cannot afford it, farm workers and pensioners living in those districts certainly cannot.
If Conservative Members wish to serve those whom they particularly profess to represent they should look again at the clause and ensure that there is even-handed treatment. It is all very well to offer Londoners the prospect of a one-day service by commercial enterprise if the profits from that commercial enterprise are denied to the Post Office, meaning that extra burdens are imposed

on other areas. All the Conservative Members present will at some time have genuflected to the principle of national unity and of accepting that one part of Britain is as good, as important, and as deserving as another. If they have ever done that, I suggest that they look again at this proposal, because if they maintain this policy they will be guilty of the hypocrisy from which my hon. Friend's amendment seeks to save them.
I hope, therefore, that the Government will recognise their traditional links with rural Britain, which are beginning to look very frayed around the edges, and ensure that the Post Office is not placed in a position in which it will have to charge enormously higher costs and allow sharks to intervene to profit out of metropolitan areas, which would inevitably mean the infliction of enormous hardship upon people living in small villages and isolated communities. I hope that the Minister will receive representations from his hon. Friends who have some responsibility for those areas, whereas many Labour Members may bear less.

Mr. Butcher: I wish to take up a very small part of the remarks of the right hon. Member for Manchester, Openshaw (Mr. Morris). I refer my hon. Friend to the impact of clause 65(1)(d) and (2) and clause 67(1) on the international air courier services operating from the United Kingdom. I trust that, as on a previous occasion in the earlier hours of this morning, there will be some unanimity on the issue of time-sensitive mail for which a cost per item of more than £1 is levied. I have particularly in mind the position of those air courier services which operate a counter collection service. I should be grateful if my hon. Friend would clarify the position, as he has done on point-to-point collection and delivery from airports, and so on. Perhaps he will clarify the position with regard to those three provisions as they affect counter collection services on the basis of an assumption, which I believe goes some way towards meeting the point raised by the right hon. Member for Openshaw, that each individual item will almost certainly cost more than £1. I am informed that the average is about £5 per item and that it is indeed time-sensitive mail.

Mr. John Home Robertson: I am grateful to my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris) for giving the House an opportunity to discuss the proposed breach of the Post Office's monopoly over postal services. I am also grateful to him for having given us an opportunity to vote on this issue.
I was particularly interested in one of my right hon. Friend's points. He explained that the precedent for the postal monopoly dated back about 300 years. The forefathers of our present postal service had the foresight to understand the obvious necessity of a universal postal service that could serve the remotest parts of the United Kingdom in addition to metropolitan areas such as London, Manchester, Glasgow, and Edinburgh.
We often think of the Secretary of State for Industry as an antediluvian man and as someone from the Stone Age. We now have positive proof that he dates back at least 300 years. It stands to reason that if there is to be a universal postal service that will allow messages and parcels to be delivered to all parts of the United Kingdom, the profitable


parts of the service in the metropolitan areas should be able to cross-subsidise the less profitable, loss-making services of our remote areas.
I represent a rural area of Scotland. Therefore, I am acutely aware of the need to maintain such an essential form of communication in the remote areas not only of my constituency but of the Highlands and Islands. It is significant that whether a person lives in a remote lighthouse, on an off-shore island, in a remote croft or in a hill farm he can post a letter, and letters and parcels will, in turn, be delivered to him. Indeed, that enables people to write to their Member of Parliament. There are moments when I earnestly wish that they found it a little less easy to get messages to me. However, perhaps I should withdraw that remark in case it is quoted too widely in my constituency.
My hon. Friend the Member for Rother Valley (Mr. Hardy) mentioned shopping by mail order. It is becoming increasingly difficult for those in the remote parts of Scotland to get the supplies from shops that others take for granted. They use mail order services. The post enables people to communicate with their friends and relatives both at home and abroad. it enables people to receive Giro cheques for social security benefits, and so on.
I have referred to essential communications to which everyone should have access. There are more than 60 polling stations in my constituency. There will be almost double that number of sub post offices. Indeed, it is a remarkable constituency. I do not think that any other hon. Member could say that he had only one set of traffic lights in his constituency. That gives some indication of how rural it is.

Mr. D. N. Campbell-Savours: Did my hon. Friend hear the comments made by my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris)? He referred to the activities of Randall's in 1973. My hon. Friend mentioned the payment of supplementary benefit by Giro. If letters, including cheques and Giro bank payments, were dealt with in the way that they were in the case referred to, what would be the effect on those families who are in dire need in his constituency?

Mr. Home Robertson: It is self-evident that such a development would be extremely alarming. People might have to wait a long time before receiving benefit payments. They might have to pay a great deal for the delivery. The service would also be less reliable. My hon. Friend has raised an extremely important point.
The mention of traffic lights leads me to think of the other place. Perhaps my constituency is unique in that seven peers of the realm live within its boundaries. I am frequently thankful that they are not allowed to vote. It is self-evident that the kind of breach of the postal monopoly proposed by the Government could cause acute difficulty, for all the reasons to which I have referred, to many of my constituents and people living in rural Scotland, England, Wales and Northern Ireland. I am not talking just about the direct delivery of postal packets and letters by the Post Office. It is important to realise that in remote parts of my constituency the postees, as we affectionately describe them in my part of the world, also deliver items such as prescriptions of medicine to those who live in remote farmsteadings and villages far away from the nearest chemist. That kind of facility is provided by the Post Office. I wonder whether such a facility would be provided

by a private contractor. Indeed, I doubt whether any private contractor would contemplate providing a so-called free enterprise postal service in an area such as mine.
I believe that in a constituency such as mine the measure could rapidly lead to a massive price increase in the postal service. It would lead to serious reductions in the quality of the postal service, if not its total destruction; and that in due course would mean that many o f my constituents and others in rural parts of the United Kingdom would become completely cut off and would no longer be able to get messages and parcels from one part of the country to another.
The Government have meted out some exceptionally harsh treatment to rural areas of the United Kingdom. My hon. Friend the Member for Rother Valley has already illustrated the list of damaging things that the Government have done which are doing great harm to rural society throughout the Kingdom. The present measure will add insult to injury. I hope that the House will accept and support the amendment moved by my right hon. Friend the Member for Manchester, Openshaw.

Mr. Richard Page: I propose to be brief. I want my hon. Friend to clarify two questions when he replies. They concern the doubts facing the people operating in the time-sensitive mail area. It is only fair to tell the House that 3,000 people are employed in that operation. The air courier services are major purchasers of air tickets and cargo space. We should bear that in mind. From their point of view we do not want there to be any misunderstandings in the interpretation of the Bill.
When I moved an amendment in Committee—the amendment is now subsection (1)(d)—I wished to exernpt air courier services from collections within the United Kingdom for delivery abroad and, in turn, to rely upon the suspension allowances under clause 67. That was referred to by my hon. Friend the Member for Coventry, South-West (Mr. Butcher). The operation, by its nature, does not make it comparable or competitive with the Post Office, accounting for less than 1 per cent. of its whole operation. I am anxious that the question of exemption shall apply if a messenger picks up a number of time-sensitive items from within the United Kingdom from a number—in both cases I emphasise the word "number"—of different people and delivers them to an aircraft.
I shall be grateful if my hon. Friend will confirm that the effect of subsection (2) would not preclude air courier companies from picking up items of mail and taking them to an aircraft if requested. Will he similarly confirm that under subsection (1)(d) a messenger collecting from different people on request will be acting within those same exemption terms?

Mr. Stoddart: I support the sensible amendment moved by my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris). Like my hon. Friend the Member for Berwick and East Lothian (Mr. Home Robertson), I noted that my right hon. Friend said that the Post Office monopoly had existed for over 300 years.
The Secretary of State has prehistoric ideas not only about the Post Office monopoly but about economic, financial and political matters. My right hon. Friend the Member for Openshaw said that the proposal to break the


monopoly was counter to all expert advice, which again is in line with the right hon. Gentleman's thinking. He never takes decent expert advice. He is ignoring advice from 364 economists. The right hon. Gentleman has a closed mind, which is particularly regrettable on this issue, because the consequences for the Post Office and its customers will be serious.
Many of my hon. Friends have mentioned rural areas. I do not represent a rural areas I represent the thoroughly good and forward-looking area of Swindon, but we have much countryside around us. People from rural areas consistently write to me about the problems that they have, for instance, over rural transport, which are being exacerbated by the Government. Some have a bus service that runs only once a week, and some have no service at all. The massive increase in petrol tax is also a problem. Another worry concerns the future of rural post offices. People fear that sub-post offices will lose business and close because of the Government's actions and that the rural community will be deprived of good and efficient services that it has enjoyed for many years.

Mr. Skinner: Rural post offices have taken a hard knock from the Government, although they had a last-minute escape from some of the harsher consequences of the Rayner report. These proposals will further diminish their services and their ability to carry on. I do not doubt that that is as important to many areas around Swindon as it is to Bolsover.

Mr. Stoddart: Yes, indeed. People in rural areas are grateful to hon. Members for the fight put up on both sides of the House against the Government's proposals, which would have led to the diminution of services and the closure of sub-post offices, which are vital to rural communities.
These new measures will further put at risk the public and social services that rural post offices perform. People are sensitive about their post offices. They go to the postmaster not only to buy stamps, and so on, but to get advice about a wide range of matters, such as social security and unemployment benefit.
1 pm
My hon. Friend the Member for Bolsover (Mr. Skinner) was right to refer to the sub-post offices that are being closed in urban areas, including the area that I represent. Over a period I have made representations about a number of closures that have caused problems to my constituents, particularly old people. If the Post Office is to suffer a further reduction in revenue and a greater degree of unprofitability, pressure will grow for the closure of sub-post offices and for a reduction in the quality of the postal delivery service. At one time we believed that the bus would come so many times a day in rural areas. We believed that we would always be able to get a bus into town. The service was taken for granted. We have since learnt that it should never have been taken for granted. In many areas rural bus services have disappeared or have been drastically reduced.
A similar development could happen in the postal service. The Post Office might decide to deliver every other day instead of every day. I do not want to frighten people, or to worry them. It is, however, a possibility. Another possibility is that the Post Office, because of

unprofitability due to the loss of the monopoly, will decide to deliver not to the door but to certain points in the area, which would be a worsening of the service. Those are the dangers of ending the Post Office monopoly.
The Government continue to be fond of handing over profitable parts of publicly owned industry for exploitation by privateers. It is happening in the Bill. In the Post Office, the profitable services will be creamed off. The privateers will take the cream off the business and leave the Post Office with the skimmed milk—and, of course, the customer will have to pay. If my reading of the Bill is right, I believe that the situation is even worse. The privateers will be able to post into the Post Office system at any point and therefore get the use of the infrastructure of the Post Office, which has been built up, with public money, over a long period. They will get that, I understand, for nothing.
The public, the taxpayer and the person who sends a letter will be subsidising the profits of the privateers. That is bad. I believe that the Bill, as a whole, is a bad one. This clause is especially pernicious and will undermine the great Post Office, known to us all our lives, known to our forefathers, and trusted by the public.
Trust is important. It is the trust of a person who sends mail to a destination knowing that it will be delivered to the right address. The undermining of trust will be bad for the Post Office and bad for the country. I believe that the amendments proposed by my right hon. Friend are excellent. I hope that when it divides, as I am sure it will, the House will agree to the amendments.

Mr. Campbell-Savours: During the past 24 hours the Government may have had the fact brought home to them that when several thousands of our constituents descended upon London to put their case in a national lobby, they should listen to the wisdom of the Members of Parliament who have pressed the case that has been pressed upon them in the lobby. If Parliament does not respond to the needs of the people, Parliament has failed.
In this debate it is hard to identify any people, apart from profiteers, who want the clauses. They, of course, will make money out of the measure. But many of us believe that money should not be made too easily in this area by private operators who are not subject to the same social pressures as are the publicly owned utilities.
In my conversations with the people who were involved in the lobby—perhaps I attracted certain types—it was interesting to find that this was the part of the Bill that was causing the greatest concern. Post Office workers clearly wanted the Government to make a change but said that a future Labour Administration, too, would need to change the clauses in the Bill. It is not for me, a humble Back Bencher, to make pledges on behalf of future Labour Administrations, but it is clear that a future Labour Government will respond to that demand and dismantle what can be seen only as a particularly foolish provision. Indeed, that Government may even reverse much of the legislation that we are considering today.
There was the Select Committee on Nationalised Industries in 1967, and then the Carter committee, under the chairmanship of Mr. Charles Carter, the vice-chancellor of Lancaster university, which was appointed to conduct a wide-ranging inquiry into the structure and operations of the Post Office, published recommendations in 1977. Clearly, the committee did not recommend what is proposed in the Bill. I get my information, as I


invariably do, from yet another campaign guide for the Conservative research department—always a useful source of information. That guide drew my attention to what I regard as a mighty inconsistency on the part of the Government in this debate.
I speak as a modest new Member of the House, but I feel that the Select Committee on Nationalised Industries has an important part to play in the proceedings of this House and, certainly, in the deliberations of government. When the Select Committee was widened and set up, I listened in the Tea Room to people who told me of the great benefits that the new system was about to bestow, and I listened intently to the debates in this Chamber about the value of the Select Committees.
I was told that hon. Members, collectively, representing both sides of the House and reflecting opinions across the party political spectrum, would be able, by means of the new arrangements, to sit in Committees and make not so much decisions as recommendations that would have a direct bearing on future Government strategy and policy.
My hon. Friend the Member for Bolsover (Mr. Skinner) shakes his head but he has always been cynical about such matters, as was my right hon. Friend the Leader of the Opposition when I was a candidate awaiting my arrival in this place.
Hon. Members have fought for many years for the Select Committees. They believed that the Government would take note of what they said. It was thought that the collective wisdom of hon. Members would be regarded as more important than the collective so-called wisdom of civil servants.
The Committees give the House the right to inquire, investigate, probe and recommend, and sometimes to call upon the richness of the knowledge and experience of civil servants in whatever recommendations they make. In this case they made a recommendation and the collective wisdom of Members was that their recommendation should not be accepted and put in legislation. The Government seek to ignore that.
My right hon. Friend the Member for Manchester, Openshaw (Mr. Morris) said that the postal monopoly had existed for about 300 years. The people are justified in asking why it should be changed after all that time. What has gone wrong? We do not know what has gone wrong because we do not receive complaints. In my 21 months in the House I have not received a letter from any constituent questioning the ability of the Post Office to provide an effective service.
It is not a question of negligence by the Post Office; it is clearly something else. My hon. Friends are united in their belief. Perhaps Government Members say in private that pure dogma determines the Government's attitude towards releasing sectors of the public utilities to private enterprise.

Mr. Michael Marshall: Is the hon. Gentleman saying that he has received no complaints about increased postal charges? I should be surprised if he were the sole exception.

Mr. Campbell-Savours: The Minister exaggerates. I have received no such letters. The Minister suggests that constituents are complaining. I have received no complaints. I wonder whether the Minister can say truthfully that he has received complaints in his personal capacity.

Mr. Michael Marshall: I have had many.

Mr. Campbell-Savours: Why has the Minister had complaints when we have not?

Mr. Michael Marshall: Perhaps constituents think that it is a waste of time to complain to the hon. Member and that they have a better chance of success by complaining to me.

Mr. Stoddart: Perhaps people are writing to the Minister because they know that the Government is at fault. They expect redress from the Government. That is why people are writing to the Minister rather than Back Bench Members of the Opposition.

Mr. Campbell-Savours: Perhaps our constituents do not write to us because they understand the Government's inflexibility. Traditionally it might have been possible to communicate in correspondence with my right hon. and hon. Friends on many issues, but people are beginning to recognise that it is a waste of time. The Government show no flexibility. I look forward to the day when people can write to me about a great number of issues in the knowledge that when we put our case the Government will show flexibility. The hon. Gentleman knows better than any other that there is one issue on which the Government have shown totally indefensible inflexibility.

Mr. Deputy Speaker: I draw the attention of he hon. Member to the fact that we are dealing with an amendment, and that has not come into his speech for some time.

Mr. Campbell-Savours: We are dealing with a series of amendments, as I understand it, that have the effect of breaking the Post Office monopoly, and I am trying to argue a general case around that problem and the fact that the Government should not seek to take such a position and bring it forward in the form of legislation.
My hon. Friends referred to the problems that may arise in the rural areas. I always take great pleasue in reading the campaign guides of the Conservative Party—I have three with me this morning—and it is very strange that they always seem to imply that Conservative Governments respond to the individual. At the heart of it, they tell us, is the individual. Whatever section it may be—industry, trade, employment, training, transport—it is somehow wrapped up in the rights of the individual.
The rights of the individual are indeed paramount" but it might be interesting to learn from the Government to what extent they have consulted individuals, perhaps collectively. In the case of my constituency, was there any consultation with the Allerdale district authority about the impact that the breaking of this monopoly might have on a rural constituency such as my own? Was there any correspondence outside in my constituency—because the question also covers the constituency of the Secretary of State for the Home Department. Of course, he could not intervene, but I should have thought that he, too, would hope that the Government would endeavour to consult the Allerdale authority or the county council of Cumbria on what it thought about the introduction of this piece of legislation.
What we have been noticing over the period of the last few months is that the Government are increasingly producing legislation based on dogma, without any consultation. Why has the hon. Gentleman not consulted?


Perhaps he would like to intervene again and tell me why he did not ask my local authority what they thought would be the impact of this legislation on the 94,000 people who live in my constituency.
Rural areas such as my own will be affected; the small towns, as my hon. Friend the Member for Swindon (Mr. Stoddart) said, will be affected. They will all be affected because of the loss of the cross-subsidisation facilities which have traditionally existed within the Post Office in the supply of these services.
There is no better way to look at the principles of cross-subsidisation and the effect of the loss of profitable business through cross-subsidisation than to look at the air industry. I quote it as an example of what happens when Governments take foolhardy action by allocating business to private enterprise in such a way that it damages the essential services.
A Bill, or a statement, came before the House a couple of months ago. I am sure that my hon. Friend the Member for Keighley (Mr. Cryer), who will no doubt follow me, will comment on that, because his memory for that sort of thing is better than mine. The Government will recall that it came to this House for additional moneys to fund British Airways, and one of the reasons given was that they lost routes—

Mr. Deputy Speaker: Order. I hope that the hon. Member for Workington (Mr. Campbell-Savours) will relate his remarks more closely to the amendment.

Mr. Campbell-Savours: I find it difficult to argue my case in favour of cross-subsidisation if I am denied the right to use parallel examples of where it has worked traditionally and where its removal will damage future prospects, in this instance the prospects of the Post Office monopoly. Unless you insist, Mr. Deputy Speaker, that I be not allowed to use this example, I feel that I must proceed.
It appears that Laker Airways took business from British Airways—I have never objected to the Laker operations—and British Airways were forced into a position whereby it was losing money on a number of routes. Surely there is a parallel in that example. Surely we can learn something from that. If we take away certain types of business from the Post Office it is clear that in other areas there will losses and that others will be required to pick up the bill.
I can tell the House who will have to pay the bill. My constituents in rural areas will pay. Those in Keswick, Cockermouth and all the towns in the Lake District who are the constituents of the Government Chief Whip and the Secretary of State for the Home Department will pay higher charges or, alternatively lose the type of rural delivery service that they now enjoy. I ask the hon. Gentleman to do what I asked the Under-Secretary of State for Transport to do on Second Reading of the Transport Bill—namely, to tell us that our constituents will not suffer. Let us have an assurance from the Dispatch Box. We received one from the Under-Secretary of State for Transport. The hon. and learned Gentleman now has to preside over a refusal by the traffic commissioners to award a route. If he moves the wrong way he may have to undermine the reply that he gave me on Second Reading of the Transport Bill. On this occasion the Under-Secretary of State should say clearly that our constituents

will be fully protected and insulated against higher prices that stem directly from the changes in the monopoly of the Post Office.
This is not the first difficult piece of legislation that has passed through the House in the past few months that I group under incomes policy measures. This is an attempt to remove the Post Office monopoly in conditions where there is industrial action. We are bypassing the circuit that normally exists to provide a facility or a service. About five or six months ago changes were introduced for the issuing of heavy goods vehicle licences to Army personnel. Some months ago we were required to accept a measure affecting prison officers and introducing changes in the light of the lack of accomodation for prisoners. That object of such measures is to bypass the Government's difficulties with trade unions in areas of wage bargaining. In some respects the Bill before us is part of an incomes policy. I refer to the section that was dealt with by my right hon. Friend the Member for Openshaw.
In the Conservative Party's 1974 campaign guide there is an interesting comment on rural mails. We are discussing the breaking of the Post Office monopoly and the effect that that will have on rural mails in my constituency and in other constituencies that are fundamentally rural with perhaps industrial population centres.
I shall quote the paragraph on page 112, under the section "Government and Industry". My hon. Friends will already be convinced on that point. Conservative Members may take the point. It states:
Conservatives recognise the importance of the nationalised industries to the economy. They currently account for some 16 per cent. of gross national product … Unlike Labour, Conservatives have never believed that the issue of nationalisation or denationalisation is a matter to be decided on doctrinaire grounds. Naturally, Conservatives much prefer private enterprise to run a high proportion of the economy but it is simply not feasible to sell off all the nationalised industries regardless of price or consequences. In many instances, the industries are natural monopolies and must remain subject to public control.
We should all learn from that admission. Conservative Members need reminding of it from time to time, as they will be on Tuesday and Thursday next week, when the Steel Bill will be discussed.
Under the section "Financial Results", it states:
There is no clear measure of the "cost" of nationalised industries—many have made a lower return on capital than would have been the case had they been privately owned. On the other hand the nation has obtained certain financially unquantifiable benefits. The public utilities are largely natural monopolies that as state industries have been able to serve the public more extensively than a purely profit-oriented approach would justify—rural mails, for example.
That is what we are arguing. Our case is in the Conservative policy document of 1974.

Mr. Matthew Parris: I am glad that the hon. Member for Workington (Mr. Campbell-Savours) quoted the extract from the campaign guide. I stand by that. Nothing in that extract is inconsistent with the Bill or with Government policy. I represent a rural area that depends heavily on what is no doubt a fairly unprofitable postal service, although it serves us well.
The principal point made by Opposition Members is true. It is unexceptionable, and does not necessarily lead us into the Division Lobby behind this series of amendments. The principal point made by Opposition Members is that if the profitable parts of the postal service


are creamed off by private enterprise the inherently unprofitable parts will become more expensive than before and the cost to the Government will be greater. I accept that.
When my hon. Friend the Minister replies it will be necessary for him to say only that he realises that the apparent cost to the Government of maintaining rural postal services may become higher if the profitable parts of the postal service are creamed off. It will be necessary for him to say only that, and that the Government are prepared to meet those costs because they accept that we need a rural postal service that is within the means of those who live in rural areas. Any objections to those provisions in the Bill are swept away.
The increased costs that will fall upon the Chancellor of the Exchequer in subsidising rural postal services will to some extent be met by taxation from the profits of private operators who go into the urban postal services. That seems a commonsense matter to me, and I do not understand why such heat has been generated on the subject.

Mr. Laurie Pavitt: I rejoice in the naivety of the the hon. Member for Derbyshire, West (Mr. Parris) in hoping that when the profitable parts of both the postal and telecomminications services are hived off the Government will produce money out of public expenditure to spread the cost of services between rural and urban areas—for example, to make it equitable to deliver a letter to the Outer Hebrides once the City of London postal area has gone to a private contractor.
I want to refer to Cable and Wireless. What I have to say will be in keeping with most of the comments that have so far been made on the Bill.
For many years the Post Office research station was based at Dollis Hill, in my area. It has recently moved elsewhere. One of the fantastic public ownership achievements of Post Office research was the transatlantic cable. That was pioneered and organised by the Post Office. It sold licences to other countries and made a huge profit, especially from sales to the United States. I am concerned that if we hive off these facilities those with the expertise will find that they are not consulted about their efforts and achievements.
The House knows that I speak more on health matters than on telecommunications. The Post Office pioneered the first hearing aid for the Medical Research Council. The research was carried out at the Dollis Hill research station, and the instrument was called Medresco. We are talking about hiving off the results of years of public expenditure on research into projects such as the Medresco hearing aid. If that part goes to private enterprise those who put in the effort on such projects will see their work go to other areas for the private profit of commercial concerns.
The House will know that the telephones behind the Chair and in the Members' Lobby are specially equipped with transistorised handsets. Again, the Post Office was responsible for that equipment. If such sectors are hived off, those who created these aids will not be adequately consulted and the results of their enterprise will not be for the benefit of those who paid for them—the taxpayers.
British Telecom is carrying out reseach into a new electro-magnetic device for telephones. The House is one of the few public buildings to have what is called a loop. It took eight years to get it, but eventually we did. The

other place has not yet got it. Running through all the Benches in this Chamber is a loop. Similar research has been carried out and installed by the Post Office in public buildings. In the next 10 years this will have a tremendous commercial impact.
The National Theatre has already agreed that this experiment shall be carried out on some of the seats in all three of its theatres. Public buildings, cinemas and other places will need to be fitted with this device to help those with a hearing impairment. The Post Office has been of tremendous help in this respect. This device could be a great social asset. Therefore, it is important that those involved—for example, Cable and Wireless employees who use the transatlantic cables—should be involved in consultations on these matters.
I have been selected as one of the guinea pigs for the new telephone device. In this House we have had experiments on the electro-magnetic handset. The pressure is on to have these devices in all Crown post offices, air terminals and major railway terminals. Someone might see a profit in this development. It would be unjust if that research, which has attracted public money to develop that device, were creamed off to the profit-making sector.

Mrs. Kellett-Bowman: I am extremely interested in what the hon. Gentleman is saying, because it concerns the disabled. Would it be possible to patent that device?

Mr. Pavitt: It is not possible at present, although a clause in the Bill will make licensing possible. At present, no telephone device for the hard of hearing may be installed without the permission of the telecommunications centre.
Discussions are taking place on the possibility of obtaining a British Standards Institution certificate of decibel audibility. I apologise for wearying the House with technicalities, but that is part and parcel of the discussions that should be taking place with the people who have produced the devices that are of use to the community. That would be of benefit in equalising the amounts needed to pay for the postal and telephone services. Those people should have the maximum amount of impact both on telecommunications and on the Minister, in order to ensure that justice is done.
Thanks to the research carried out at the Dollis Hill research station, a whole range of devices is now available. I very much regret that the public industry has never received credit for the huge amount of profit that it has made. For example, the transatlantic cable was invented under public ownership. Cable and Wireless was able to use that device, and the Post Office received profits from America. I believe that Cable and Wireless employees, as well as all other employees, should have the right to meaningful consultation.
I remind the House of the way in which research is carried out under public enterprise and the way in which it can be transferred elsewhere. Penicillin was discovered by Alexander Fleming. It was patented, but it was given to America, and the profits went to America. Therefore, when Cable and Wireless uses the research carried out at Dollis Hill on the transatlantic cable and other devices, the advantage should accrue to the taxpayer who has financed the research. Such research should not be hived off to private industry so that it can make profits. The people who have devoted their lives and service to the business should be brought into the consultations to the maximum amount possible.

Mr. Michael Marshall: We have had an interesting debate on the derogation of the postal monopoly. The hon. Member for Brent, South (Mr. Pavitt) was listened to with great interest, as the House is aware of his great knowledge of the matters to which he referred. However, I hope that he will forgive me if I do not follow him down that route. He made some interesting comments, and on another occasion I hope to reply to some of them. I very much took on board what he said about the effectiveness of the Post Office research station at Dollis Hill, and in this, our twenty-third hour of debate, the Post Office has received much praise for the research that it has carried out.
The right hon. Member for Manchester, Openshaw (Mr. Morris) seeks not only to remove some of the exemptions to the monopoly currently envisaged in the Bill, but proposes an alternative system. He deserves a detailed answer, as he attempted to put forward a constructive package.
It is quite clear that in his amendments the right hon. Gentleman is intent on removing from the Bill all the new statutory exemptions from the monopoly contained in clause 65. He is also seeking to remove the Secretary of State's power to make any further derogations from the monopoly through the use of his power of suspension in clause 67.
Instead, it is suggested that the Post Office should be given power to waive its exclusive privilege
with the consent of, or in accordance with a general authority given by, the Secretary of State".
These are separate items, and I think that it would be best to treat them as such.
With regard to the statutory exemptions from the monopoly, the right hon. Gentleman seeks, in effect, to revert to the position under the 1953 Act. I must tell him straight away, as indeed he knows from our discussions in Committee, that I cannot agree to that. It is important for us to look at this matter in perspective from the outset. There has been a great deal of talk about creaming off and derogation from the monopoly. I emphasise from the outset that the derogations in the Bill and those which the Government have in mind amount at most to between about 1 and 2 per cent. of total postal traffic. That is the scale that we are discussing.
Let us consider the five new exemptions. One of them—in clause 65(1)(h)—was the result of a recommendation of the Monopolies and Mergers Commission on the inner London letter post. The hon. Member for Workington (Mr. Campbell-Savours) asked about consultation. One of the main processes of consultation was to use the very substantial example available of the inner London letter post and the Monopolies and Mergers Commission. It was as a result of the commission's report that one of the five exemptions has already been brought in as a derogation. Three others—in clause 65(1)(d), (j) and (k)—simply reflect activities that are carried on now. The football pool companies and, perhaps more importantly, the banks are large-scale operations vital to the business of the organisations concerned. I should have thought that there was probably little quarrel about those derogations.
The fifth derogation clarifies the legal position regarding delivery by companies of their own letters and extends exemption in accordance with the stated intentions of my right hon. Friend the Secretary of State following extensive discussions undertaken by my Department during the review of the monopoly. All of these

exemptions are important and I feel that it would be a retrograde step to do as the right hon. Gentleman suggeats and effectively return to the 1953 position.
The Opposition also suggest that the Post Office should be allowed to waive its exclusive privilege in accordance with the terms of a general authorisation given by the Secretary of State. In that situation there would be no guarantee that the Post Office would waive its monopoly in respect of activities which we believe should be exempted by statute.
This perhaps raises a further and wider point. The right hon. Member for Openshaw and a number of his hon. Friends suggest that the power in clause 67 to suspend the monopoly should be replaced by the proposed power of waiver for the Post Office. My right hon. Friend the Secretary of State has said that he wishes to be able to make derogations from the monopoly, either generally or in respect of specific categories of mail in situations in which the Post Office is not providing a satisfactory service. For the benefit of hon. Members who were not with us in Committee I can say that we debated very thoroughly the situations which could arise in the event of industrial action—problems in one particular area or throughout the country, resulting in a cessation or a serious decline in service, or if, after warning, the Post Office's performance had been unsatisfactory for reasons within its control, or, indeed, simply because it failed to meet the demand for a particular letter service.
It is clear that if the Secretary of State did not have the power in clause 67, and the power in clause 66 which I believe that the right hon. Gentleman by implication seeks also to remove, he would be unable to carry out his stated policy and thus ensure the best service to the customer. It is worth emphasising that in about 22 hours of debate very little time has been spent on talking about the customer. I believe that this is an aspect worth bringing in even at this late stage. I accept that this was raised in the context of rural services, and I shall return to that in a moment. In the wider context, what is proposed through derogation is very much intended to be part of the improved service for customers.
The hon. Member for Workington made a fair point about various delegations. During the past 24 hours most of us have seen people who expressed similar views. Indeed, some of us have seen quite a few people in recent weeks. I detected that most of the delegations raised two points. Those with rural interests raised the points that have been reflected in today's debate. Others raised the subject of pensions, which we discussed earlier.
It was interesting to note that several of those who came not only put their case fairly and well but went out of their way to admit that in a number of cases the monopoly had made life cosy. They felt that things had slipped and that they needed a better commercial edge. They thought that things were beginning to move a little more in that direction. Many freely admitted that that was due to some extent to the feeling that various moves were being made and that the monopoly was being considered. Most welcomed that. That is an important aspect to the representations that have been made.
As I said in Committee, the Government do not seek to use these powers arbitrarily. We recognise the limitations, some of which have been spelt out—in terms of the balance between the rural areas and those with heavy traffic loads. I accept the point raised by my hon. Friend the Member for Derbyshire, West (Mr. Parris). Naturally,


if there were a creaming-off operation and if the cost of rural services increased, it would represent a major problem and would act as a disincentive. That is one reason why we have not proposed to move in that direction. I shall mention the project that we have in mind, which is all we have in view by way of derogation at present.
These powers will not be used frequently. As I have said, the postal services are under critical consideration and it is recognised that there are opportunities for derogation. That is having an internal effect on improving efficiency. I hope and expect that the existence of this power and that contained in clause 66 will act as an incentive to the Post Office to provide an adequate service and thus obviate the need for their use. Powers in that sense, both when they are used and even when they are not, should thus help to achieve our prime aim, namely, the provision of the best possible postal service to the customer.
We plan to use this power in respect of one important new category of mail as soon as the Bill is enacted. This has already been announced by my right hon. Friend the Secretary of State. We intend to suspend the monopoly in respect of time-sensitive, valuable—that is to say, express—mail. This is a matter that my hon. Friend the Member for Coventry, South-West (Mr. Butcher) was particularly interested in from the point of view of counter collection services. I reiterate that we intend to use the power under clause 67 to suspend the postal monopoly in respect of such time-sensitive, valuable mail.
That means that any person who operates such a service will be able to perform in respect of such mail any of the acts that would otherwise fall within the monopoly. Those are listed in clause 64(1). Hon. Members will note that they include collecting. However, they will have to comply with the conditions that will be attached to the suspension order under clause 67(2). As hon. Members know, we intend look for about £1 for each item, thus putting the business on a fair basis and providing incentive for the existing postal service to operate in that field should it choose to do so.
The hon. Members for Rother Valley (Mr. Hardy) and for Berwick and East Lothian (Mr. Home Robertson) raised several points about rural areas and they were supported by the hon. Member for Swindon (Mr. Stoddart) and by my hon. Friend the Member for Derbyshire, West. I represent a rural constituency and I well understand the points that they made. I stress that the creaming-off argument must be taken seriously in terms of the provision of rural services.
In the wider context, the creaming-off argument is one that we have already heard in relation to some of the discussions on sub-post offices, where the Government have already made plain, for example, in any change of the loading of Government business to sub-post offices, that alternative business will have to be provided. I cite that as an example of the way in which the Government are fully conscious of the need to keep the network active and operating because we know that it gives an important public service.
My hon. Friend the Member for Hertfordshire, South-West (Mr. Page) asked me for further information about the position of air couriers. I confirm that under clause 65(2)—formerly clause 64(2)—exemption under clause 65(1)(d) would not permit the making of a collection. While it would be for the courts to decide details of an

individual case, I am advised that air couriers would not be precluded from going to pick up letters and taking them to an aircraft if specifically requested to pick them up. Similarly, I am advised that if a messenger sent for the purpose under clause 65(1)(d) were to pick up on request a number of letters from different people and take them straight to the aircraft, he would be acting under the terms of the exemption.
I am sorry that I have had to give some detail on a number of the points raised, but they reflect important queries which came up on a number of occasions in Committee. On Report, a number of hon. Gentlemen have been anxious to be quite clear about what is envisaged. I have tried to meet a number of the points that have been put to me.

Mr. Campbell-Savours: I asked the Under-Secretary for two undertakings on rural mails. Will he give them? He suggested that he would do so.

Mr. Marshall: The hon. Gentleman was asking for the kind of blanket assurance that no one can give from the Dispatch Box. I have made it clear that we take seriously the creaming-off argument on rural mails. Therefore, any suggestion that we should see rural services dissipated on the creaming-off basis is a matter about which we shall have to think very seriously. I mentioned the derogation that has been encompassed in the Bill. I give the assurance that at this time we have no other derogation in mind. I do not think that the hon. Gentleman can reasonably expect me to go beyond that.
The amendment would not help the cause that the right hon. Member for Openshaw is seeking to serve. I hope that he will feel able to withdraw it.

Question put, That the amendment be made:—

The House divided: Ayes 151, Noes 260.

Division No. 144]
[1.52 pm


AYES


Adams, Allen
Dubs, Alfred


Anderson, Donald
Duffy, A. E. P.


Archer, Rt Hon Peter
Dunwoody, Hon Mrs G.


Ashton, Joe
Eadie, Alex


Benn, Rt Hon A. Wedgwood
Eastham, Ken


Bennett, Andrew (St'kp't N)
Edwards, R. (W'hampt'n S E)


Booth, Rt Hon Albert
Ellis, R. (NE D'bysh're)


Boothroyd, Miss Betty
English, Michael


Bray, Dr Jeremy
Ennals, Rt Hon David


Brown, Hugh D. (Provan)
Evans, Ioan (Aberdare)


Brown, Ron (E'burgh, Leith)
Evans, John (Newton)


Brown, Ronald W. (H'ckn'y S)
Fitt, Gerard


Callaghan, Rt Hon J.
Flannery, Martin


Callaghan, Jim (Midd't'n &amp; P)
Fletcher, Ted (Darlington)


Campbell, Ian
Ford, Ben


Campbell-Savours, Dale
Forrester, John


Carmichael, Neil
Foster, Derek


Carter-Jones, Lewis
Foulkes, George


Clark, Dr David (S Shields)
Freeson, Rt Hon Reginald


Cocks, Rt Hon M. (B'stol S)
Garrett, John (Norwich S)


Coleman, Donald
Garrett, W. E. (Wallsend)


Cook, Robin F.
George, Bruce


Cowans, Harry
Gilbert, Rt Hon Dr John


Cox, T. (W'dsw'th, Toot'g)
Golding, John


Crowther, J. S.
Hamilton, W. W. (C'tral Fife)


Cryer, Bob
Hardy, Peter


Cunliffe, Lawrence
Harrison, Rt Hon Walter


Cunningham, G. (Islington S)
Hart, Rt Hon Dame Judith


Dalyell, Tam
Haynes, Frank


Davidson, Arthur
Heffer, Eric S.


Dempsey, James
Hogg, N. (E Dunb't'nshire)


Dewar, Donald
Holland, S. (L'b'th, Vauxh'll)


Dixon, Donald
Home Robertson, John


Dormand, Jack
Homewood, William


Douglas, Dick
Hudson Davies, Gwilym E.






Hughes, Mark (Durham)
Race, Reg


Janner, Hon Greville
Roberts, Albert (Normanton)


Jay, Rt Hon Douglas
Roberts, Ernest (Hackney N)


John, Brynmor
Robertson, George


Johnson, James (Hull West)
Robinson, G. (Coventry NW)


Jones, Barry (East Flint)
Rooker, J. W.


Kaufman, Rt Hon Gerald
Ross, Ernest (Dundee West)


Kerr, Russell
Sever, John


Kilroy-Silk, Robert
Sheerman, Barry


Leighton, Ronald
Sheldon, Rt Hon R.


Lewis, Ron (Carlisle)
Silkin, Rt Hon J. (Deptford)


Litherland, Robert
Silverman, Julius


Lofthouse, Geoffrey
Skinner, Dennis


Lyons, Edward (Bradf'd W)
Soley, Clive


McCartney, Hugh
Spearing, Nigel


McDonald, Dr Oonagh
Stallard, A. W.


McElhone, Frank
Stewart, Rt Hon D. (W Isles)


McGuire, Michael (Ince)
Stoddart, David


McKelvey, William
Stott, Roger


MacKenzie, Rt Hon Gregor
Summerskill, Hon Dr Shirley


McNally, Thomas
Thorne, Stan (Preston South)


McNamara, Kevin
Tilley, John


McTaggart, Robert
Tinn, James


McWilliam, John
Urwin, Rt Hon Tom


Magee, Bryan
Varley, Rt Hon Eric G.


Marshall, Dr Edmund (Goole)
Wainwright, E. (Dearne V)


Marshall, Jim (Leicester S)
Walker, Rt Hon H. (D'caster)


Martin, M (G'gow S'burn)
Watkins, David


Maxton, John
Welsh, Michael


Meacher, Michael
White, J. (G'gow Pollok)


Mikardo, Ian
Wigley, Dafydd


Millan, Rt Hon Bruce
Willey, Rt Hon Frederick


Mitchell, Austin (Grimsby)
Williams, Rt Hon A. (S'sea W)


Morris, Rt Hon C. (O'shaw)
Wilson, Gordon (Dundee E)


Morton, George
Winnick, David


Moyle, Rt Hon Roland
Woodall, Alec


O'Halloran, Michael
Woolmer, Kenneth


O'Neill, Martin
Young, David (Bolton E)


Orme, Rt Hon Stanley



Pavitt, Laurie
Tellers for the Ayes:


Pendry, Tom
Mr. Joseph Dean and Mr. Allen McKay.


Powell, Raymond (Ogmore)



Price, C. (Lewisham W)





NOES


Adley, Robert
Buck, Antony


Aitken, Jonathan
Budgen, Nick


Alexander, Richard
Bulmer, Esmond


Alison, Michael
Burden, Sir Frederick


Alton, David
Butcher, John


Ancram, Michael
Cadbury, Jocelyn


Arnold, Tom
Carlisle, John (Luton West)


Aspinwall, Jack
Carlisle, Kenneth (Lincoln)


Atkins, Robert (Preston N)
Chapman, Sydney


Atkinson, David (B'm'th, E)
Churchill, W. S.


Baker, Kenneth (St.M'bone)
Clark, Hon A. (Plym'th, S'n)


Baker, Nicholas (N Dorset)
Clark, Sir W. (Croydon S)


Banks, Robert
Cockeram, Eric


Beaumont-Dark, Anthony
Cope, John


Beith, A. J.
Corrie, John


Bell, Sir Ronald
Costain, Sir Albert


Bendall, Vivian
Cranborne, Viscount


Benyon, Thomas (A'don)
Crawshaw, Richard


Benyon, W. (Buckingham)
Critchley, Julian


Bevan, David Gilroy
Crouch, David


Biffen, Rt Hon John
Dean, Paul (North Somerset)


Biggs-Davison, John
Dorrell, Stephen


Blackburn, John
Douglas-Hamilton, Lord J.


Bonsor, Sir Nicholas
Dover, Denshore


Boscawen, Hon Robert
du Cann, Rt Hon Edward


Bottomley, Peter (W'wich W)
Dunn, Robert (Dartford)


Bowden, Andrew
Durant, Tony


Boyson, Dr Rhodes
Eden, Rt Hon Sir John


Bright, Graham
Eggar, Tim


Brinton, Tim
Ellis, Tom (Wrexham)


Brittan, Leon
Fairbairn, Nicholas


Brooke, Hon Peter
Faith, Mrs Sheila


Brotherton, Michael
Farr, John


Brown, Michael (Brigg &amp; Sc'n)
Fenner, Mrs Peggy


Bryan, Sir Paul
Finsberg, Geoffrey





Fisher, Sir Nigel
Maude, Rt Hon Sir Angus


Fletcher, A. (Ed'nb'gh N)
Mawby, Ray


Fletcher-Cooke, Sir Charles
Mawhinney, Dr Brian


Fookes, Miss Janet
Mayhew, Patrick


Fowler, Rt Hon Norman
Meyer, Sir Anthony


Fox, Marcus
Miller, Hal (B'grove)


Fraser, Peter (South Angus)
Mills, Iain (Meriden)


Freud, Clement
Mills, Peter (West Devon)


Fry, Peter
Miscampbell, Norman


Gardiner, George (Reigate)
Moate, Roger


Garel-Jones, Tristan
Monro, Hector


Glyn, Dr Alan
Montgomery, Fergus


Goodlad, Alastair
Moore, John


Gorst, John
Morgan, Geraint


Gow, Ian
Morris, M. (N'hampton S)


Gower, Sir Raymond
Morrison, Hon C. (Devizes)


Grant, Anthony (Harrow C)
Mudd, David


Gray, Hamish
Murphy, Christopher


Greenway, Harry
Neale, Gerrard


Griffiths, E. (B'y St. Edm'ds)
Needham, Richard


Griffiths, Peter Portsm'th N)
Nelson, Anthony


Grist, Ian
Neubert, Michael


Grylls, Michael
Newton, Tony


Gummer, John Selwyn
Onslow, Cranley


Hamilton, Hon A.
Oppenheim, Rt Hon Mrs S.


Hamilton, Michael (Salisbury)
Osborn, John


Hampson, Dr Keith
Page, Rt Hon Sir G. (Crosby)


Hannam, John
Page, Richard (SW Herts)


Haselhurst, Alan
Parris, Matthew


Hastings, Stephen
Patten, Christopher (Bath)


Hawkins, Paul
Pawsey, James


Hawksley, Warren
Penhaligon, David


Heddle, John
Pink, R. Bonner


Henderson, Barry
Pollock, Alexander


Heseltine, Rt Hon Michael
Porter, Barry


Hicks, Robert
Price, Sir David (Eastleigh)


Hill, James
Proctor, K. Harvey


Hogg, Hon Douglas (Gr'th'm)
Pym, Rt Hon Francis


Hooson, Tom
Raison, Timothy


Howe, Rt Hon Sir Geoffrey
Rathbone, Tim


Howell, Ralph (N Norfolk)
Rees-Davies, W. R.


Hunt, David (Wirral)
Rhodes James, Robert


Jenkin, Rt Hon Patrick
Rhys Williams, Sir Brandon


Jessel, Toby
Ridley, Hon Nicholas


Jopling, Rt Hon Michael
Rifkind, Malcolm


Joseph, Rt Hon Sir Keith
Roberts, Wyn (Conway)


Kaberry, Sir Donald
Ross, Stephen (Isle of Wight)


Kellett-Bowman, Mrs Elaine
Rossi, Hugh


Kershaw, Anthony
Rost, Peter


Kilfedder, James A.
Sainsbury, Hon Timothy


King, Rt Hon Tom
Scott, Nicholas


Knight, Mrs Jill
Shaw, Giles (Pudsey)


Knox, David
Shelton, William (Streatham)


Lamont, Norman
Shepherd, Colin (Hereford)


Lang, Ian
Shepherd, Richard


Langford-Holt, Sir John
Shersby, Michael


Latham, Michael
Silvester, Fred


Lawrence, Ivan
Sims, Roger


Lawson, Rt Hon Nigel
Skeet, T. H. H.


Lee, John
Smith, Dudley


Lennox-Boyd, Hon Mark
Speed, Keith


Lester, Jim (Beeston)
Speller, Tony


Lewis, Kenneth (Rutland)
Spicer, Jim (West Dorset)


Lloyd, Peter (Fareham)
Spicer, Michael (S Worcs)


Loveridge, John
Sproat, Iain


Luce, Richard
Squire, Robin


McCrindle, Robert
Stanbrook, Ivor


MacGregor, John
Stanley, John


MacKay, John (Argyll)
Steen, Anthony


Maclennan, Robert
Stevens, Martin


Macmillan, Rt Hon M.
Stewart, Ian (Hitchin)


McNair-Wilson, M. (N'bury)
Stewart, A. (E Renfrewshire)


McNair-Wilson, P. (New F'st)
Stokes, John


McQuarrie, Albert
Stradling Thomas, J.


Madel, David
Taylor, Teddy (S'end E)


Major, John
Temple-Morris, Peter


Marland, Paul
Thatcher, Rt Hon Mrs M.


Marlow, Tony
Thomas, Rt Hon Peter


Marshall, Michael (Arundel)
Thompson, Donald


Mates, Michael
Thorne, Neil (Ilford South)






Thornton, Malcolm
Wells, John (Maidstone)


Townend, John (Bridlington)
Wells, Bowen


Townsend, Cyril D, (B'heath)
Wheeler, John


Trippier, David
Whitelaw, Rt Hon William


Trotter, Neville
Whitney, Raymond


van Straubenzee, W. R.
Wickenden, Keith


Vaughan, Dr Gerard
Wiggin, Jerry


Viggers, Peter
Wilkinson, John


Waddington, David
Williams, D. (Montgomery)


Wakeham, John
Winterton, Nicholas


Waldegrave, Hon William
Wolfson, Mark


Walker, B. (Perth)
Young, Sir George (Acton)


Walker-Smith, Rt Hon Sir D.
Younger, Rt Hon George


Waller, Gary



Ward, John
Tellers for the Noes:


Warren, Kenneth
Mr. Spencer Le Marchant and Mr. Carol Mather.


Watsoo, John

Question accordingly negatived.

Clause 77

POWERS OF TREASURY TO DISPOSE ETC. OF THE SHARES OF CABLE AND WIRELESS LIMITED

2 pm

Mr. Mikardo: I beg to move amendment No. 71, in page 66, line 4, after 'State', insert
`and with the trade unions recognised as representing the employees of Cable and Wireless Limited'.
The amendment concerns the affairs of Cable and Wireless Ltd. We had a long debate on the subject during proceedings in Standing Committee. I believe that it would be an abuse of the time of the House and of the patience of hon. Members—some of us have sat here for nearly 24 hours—if I were to attempt to go over anything like the whole of the ground that was covered when we debated the matter in Committee.
On that occasion we dealt broadly with the subject, notably because we voted against the motion that clause 76, as it then was, stand part of the Bill. We concerned ourselves broadly with the act of vandalism that is being committed on Cable and Wireless in the Bill, an act of vandalism spatchcocked into a Bill that has nothing to do with Cable and Wireless, an act of vandalism inappropriately and incongruously inserted into a Bill that is about British Telecommunications and the Post Office.
On that occasion I also moved a number of amendments that required that before selling off shares in Cable and Wireless the Government should have consultations, for example, with the chairman of that company. It seemed to me and to most members of the Committee absolutely idiotic that the Secretary of State, or the Treasury acting with and through him, should have powers to sell off shares in a publicly owned company without ever even telling the chairman or the board of the Government's intentions. Other amendments that were moved sought to limit the sale of the shares. I shall mention one, which was designed to secure that the control of Cable and Wireless Limited—a priceless British asset—should not fall into the hands of foreigners.
I repeat that to have attempted to table those amendments at this stage and to take a chance on whether you, Mr. Speaker, would select them, and to argue the case, would have been an abuse of the House's time. I therefore tabled this amendment, which we did not discuss in Standing Committee, which requires that before shares are sold the representatives of the company's employees shall be consulted.
There is a good reason for such consultation, namely, that the sale of those shares can affect the company's activities and, hence, its employment and employment prospects. As I shall seek to show, the announcement by the Minister, two or three weeks ago, of the projected sale, and the publication of the Bill before that, have already affected very adversely the activities, operations, value and profitability of the company. Those are all matters of great concern to the company's employees.
Although, for reasons that I still find inexplicable, the Minister would not accept an amendment that required that the chairman of the company should be consulted before any shares were sold, I hope—especially now that we are honoured by the presence of the boss man himself—that the Government, who are always paying lip service to the necessity for employers to consult their workers' representatives about matters affecting their livelihoods, will look more kindly upon this amendment.
The rape of Cable and Wireless is doctrinaire vandalism. Cable and Wireless is one of the greatest British success stories, public or private. If it had been privately owned Government Members would crow about it and say that it was a great example of British initiative. They do not do that, because of the accident that it is publicly owned.
Cable and Wireless is efficiently managed. Technologically, it is extremely advanced; it is rapidly expanding, commercially successful and highly profitable, and a high proportion of its earnings are made abroad. By every criterion that one might apply to judge whether a company is well run, well managed, advanced and successful, Cable and Wireless is one of the best.
Its standing overseas is great. It has licensing agreements with 31 Governments and overseas Administrations. Its standing abroad could not be higher. The company and the people who work for it and travel abroad on its behalf say that much of that standing arises from its connection with the British Government.
Conservative propaganda asserts that foreign Governments do not like to trade with nationalised industries. Cable and Wireless is a living, day-to-day example that the opposite is true. If it were true foreign Governments would not be queueing up to make licensing agreements with Cable and. Wireless in the face of stiff competition, notably from famous and efficient companies in the United States of America.
Some of the company's activities all over the world involve advanced technology. It takes part in the United States NASA space programme. It provides the electronics, guidance, navigation and direction-finding equipment for Amman and Bahrein airports. It provides the control systems for the Saudi Arabian national guard. It has a furious rate of expansion of business in the United States and in the European Community.
Everything in the garden was lovely until the Bill was published, when it became clear that lumps of Cable and Wireless would be sold. Chaps who thought that they might be buyers decided that it might be a good idea to act to reduce the value of the company's shares. They would then be able to buy them more cheaply. That is why, since the Bill's publication, there has been a frontal attack on Cable and Wireless by Hong Kong Telecom, which is first in the queue to buy Cable and Wireless shares now that it has succeeded in forcing its value down by reducing the value of the Hong Kong concession to Cable and Wireless.
Bahrein has already told Cable and Wireless that it wants a joint company, as have the Barbados and


Bermudan Governments. They have limited agreements with Cable and Wireless until they can negotiate a new deal with a cable and wireless company that will be partially privately owned. That is scandalous. However, I shall not dwell on that longer, because we gave the issue a good airing in Committee. It is not at all that I renege on the statement that this is the worst piece of doctrinaire vandalism on a fine, successful company that I can ever recall in my political experience.

Mr. Golding: Overseas, of course, ASTMS is much respected, but is seen as a managerial and London union. There are many other unions within the Postal, Telegraph and Telephone International that organise the indigenous rank and file workers. We have heard from them that those unions will be very upset by these proposals. They have not been consulted. They have been very satisfied with Cable and Wireless in recent years. There have been very good developments in industrial relations. They have been attempting to get uniform wages and conditions throughout the world and throughout the company, and the TTI hope that nothing will impede this, to which of course there is always a threat.

Mr. Orme: I endorse what both my hon. Friends have said, particularly the comments of my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) in moving the amendment.
I read with great interest the debate in Committee, and I agree with my hon. Friends that this is an act of vandalism on a company which is one of the most successful international companies in the world in high technology, which does most of its trade overseas and which helps the public sector borrowing requirement in a way that no other publicly-owned company does. If I get on to that tack I shall get into an argument, and we want to proceed to a Division. I therefore ask my hon. Friends to vote for the amendment.

Mr. Kenneth Baker: I shall not reply at length on this matter because we debated it at considerable length in Committee, and I have made a statement to the House.
I refute the suggestion that the sale of 49 per cent. of the shares in Cable and Wireless is an act of vandalism. This is releasing 49 per cent. of a State asset to the wider share ownership of the investing public of Britain. I believe that already the possibility of that privatisation is changing the attitude of the management of Cable and Wireless and that the future prospects of the company are infinitely better than what has been achieved in the past.
It would be impractical to adopt the proposals of the hon. Member for Bethnal Green and Bow (Mr. Mikardo) for consultation between the Government and the unions. This is the responsibility of the management or possibly, in certain circumstances, the shareholders, but certainly not of the Government.
The management of Cable and Wireless has discussed the arrangements for the sale of shares with offical staff representatives at the companies' regular meetings of the employee participation committee. There have been special meetings between the union chairmen and the group managing director and in addition between the Government's merchant bank advisers and the union chairmen. It would be impractical, indeed wrecking, to

require them to consult the trade unions of all their employees, because 75 per cent. of the employees of Cable and Wireless live overseas.
I emphasise again that it is our intention, when we bring this company onto the market, to make provision for the employees to own shares. I am sure that that opportunity will be welcomed as warmly as it was in British Aerospace.

Question put, That the amendment be made:—

The House divided: Ayes 152, Noes 252.

Division No.145]
[2.18 pm


AYES


Abse, Leo
Heffer, Eric S.


Adams, Allen
Hogg, N. (E Dunb't'nshire)


Anderson, Donald
Holland, S. (L'b'th, Vauxh'll)


Archer, Rt Hon Peter
Homewood, William


Ashton, Joe
Horam, John


Benn, Rt Hon A. Wedgwood
Huckfield, Les


Bennett, Andrew (St'kp't N)
Hudson Davies, Gwilym E.


Booth, Rt Hon Albert
Hughes, Mark (Durham)


Boothroyd, Miss Betty
Janner, Hon Greville


Bray, Dr Jeremy
Jay, Rt Hon Douglas


Brown, Hugh D. (Provan)
John, Brynmor


Brown, Ron (E'burgh, Leith)
Johnson, James (Hull West)


Brown, Ronald W. (H'ckn'y S)
Jones, Barry (East Flint)


Callaghan, Rt Hon J.
Kaufman, Rt Hon Gerald


Callaghan, Jim (Midd't'n &amp; P)
Kerr, Russell


Campbell, Ian
Kilroy-Silk, Robert


Campbell-Savours, Dale
Leighton, Ronald


Carmichael, Neil
Lewis, Ron (Carlisle)


Carter-Jones, Lewis
Litherland, Robert


Clark, Dr David (S Shields)
Lofthouse, Geoffrey


Cocks, Rt Hon M. (B'stol S)
Lyons, Edward (Bradf'd W)


Coleman, Donald
McDonald, Dr Oonagh


Cook, Robin F.
McElhone, Frank


Cowans, Harry
McGuire, Michael (Ince)


Cox, T. (W'dsw'th, Toot'g)
McKay, Allen (Penistone)


Crowther, J. S.
McKelvey, William


Cryer, Bob
MacKenzie, Rt Hon Gregor


Cunliffe, Lawrence
Maclennan, Robert


Cunningham, G. (Islington S)
McNally, Thomas


Dalyell, Tam
McNamara, Kevin


Dean, Joseph (Leeds West)
McTaggart, Robert


Dempsey, James
McWilliam, John


Dewar, Donald
Magee, Bryan


Dixon, Donald
Marshall, Dr Edmund (Goole)


Dormand, Jack
Martin, M (G'gow S'burn)


Douglas, Dick
Maxton, John


Dubs, Alfred
Mikardo, Ian


Duffy, A. E. P.
Millan, Rt Hon Bruce


Dunwoody, Hon Mrs G.
Mitchell, Austin (Grimsby)


Eadie, Alex
Morton, George


Eastham, Ken
Moyle, Rt Hon Roland


Edwards, R. (W'hampt'n S E)
O'Halloran, Michael


Ellis, R. (NE D'bysh're)
O'Neill, Martin


Ellis, Tom (Wrexham)
Orme, Rt Hon Stanley


English, Michael
Pavitt, Laurie


Ennals, Rt Hon David
Pendry, Tom


Evans, Ioan (Aberdare)
Powell, Raymond (Ogmore)


Evans, John (Newton)
Price, C. (Lewisham W)


Fitt, Gerard
Race, Reg


Flannery, Martin
Roberts, Albert (Normanton)


Fletcher, Ted (Darlington)
Roberts, Ernest (Hackney N)


Ford, Ben
Robertson, George


Forrester, John
Robinson, G. (Coventry NW)


Foster, Derek
Rooker, J. W.


Foulkes, George
Ross, Ernest (Dundee West)


Freud, Clement
Sever, John


Garrett, John (Norwich S)
Sheerman, Barry


Garrett, W. E. (Wallsend)
Sheldon, Rt Hon R.


George, Bruce
Short, Mrs Renée


Golding, John
Silkin, Rt Hon J. (Deptford)


Hamilton, W. W. (C'tral Fife)
Silverman, Julius


Hardy, Peter
Skinner, Dennis


Harrison, Rt Hon Walter
Soley, Clive


Hart, Rt Hon Dame Judith
Spearing, Nigel


Haynes, Frank
Stallard, A. W.






Stewart, Rt Hon D. (W Isles)
White, J. (G'gow Pollok)


Stoddart, David
Wigley, Dafydd


Stott, Roger
Willey, Rt Hon Frederick


Strang, Gavin
Williams, Rt Hon A. (S'sea W)


Summerskill, Hon Dr Shirley
Wilson, Gordon (Dundee E)


Thorne, Stan (Preston South)
Winnick, David


Tilley, John
Woodall, Alec


Tinn, James
Woolmer, Kenneth


Urwin, Rt Hon Tom
Young, David (Bolton E)


Varley, Rt Hon Eric G.



Wainwright, E. (Dearne V)
Tellers for the Ayes:


Walker, Rt Hon H. (D'caster)
Mr. Frank R. White and Mr. Hugh McCartney


Watkins, David



Welsh, Michael





NOES


Adley, Robert
Fenner, Mrs Peggy


Aitken, Jonathan
Finsberg, Geoffrey


Alexander, Richard
Fisher, Sir Nigel


Alison, Michael
Fletcher, A. (Ed'nb'gh N)


Alton, David
Fletcher-Cooke, Sir Charles


Ancram, Michael
Fookes, Miss Janet


Arnold, Tom
Fowler, Rt Hon Norman


Aspinwall, Jack
Fox, Marcus


Atkins, Robert (Preston N)
Fraser, Peter (South Angus)


Atkinson, David (B'm'th, E)
Freud, Clement


Baker, Kenneth (St.M'bone)
Fry, Peter


Baker, Nicholas (N Dorset)
Garel-Jones, Tristan


Banks, Robert
Glyn, Dr Alan


Beaumont-Dark, Anthony
Goodlad, Alastair


Beith, A. J.
Gorst, John


Bell, Sir Ronald
Gow, Ian


Bendall, Vivian
Gower, Sir Raymond


Benyon, Thomas (A'don)
Grant, Anthony (Harrow C)


Bevan, David Gilroy
Gray, Hamish


Biggs-Davison, John
Greenway, Harry


Blackburn, John
Griffiths, E. (B'y St. Edm'ds)


Bonsor, Sir Nicholas
Griffiths, Peter Portsm'th N)


Boscawen, Hon Robert
Grist, Ian


Bottomley, Peter (W'wich W)
Grylls, Michael


Bowden, Andrew
Gummer, John Selwyn


Boyson, Dr Rhodes
Hamilton, Hon A.


Bright, Graham
Hamilton, Michael (Salisbury)


Brinton, Tim
Hampson, Dr Keith


Brittan, Leon
Hannam, John


Brooke, Hon Peter
Haselhurst, Alan


Brotherton, Michael
Hastings, Stephen


Brown, Michael (Brigg &amp; Sc'n)
Hawkins, Paul


Browne, John (Winchester)
Hawksley, Warren


Bryan, Sir Paul
Heddle, John


Buck, Antony
Henderson, Barry


Budgen, Nick
Heseltine, Rt Hon Michael


Bulmer, Esmond
Hicks, Robert


Burden, Sir Frederick
Hill, James


Butcher, John
Hogg, Hon Douglas (Gr'th'm)


Cadbury, Jocelyn
Hooson, Tom


Carlisle, John (Luton West)
Howe, Rt Hon Sir Geoffrey


Carlisle, Kenneth (Lincoln)
Howell, Ralph (N Norfolk)


Churchill, W. S.
Hunt, David (Wirral)


Clark, Hon A. (Plym'th, S'n)
Jenkin, Rt Hon Patrick


Clark, Sir W. (Croydon S)
Jopling, Rt Hon Michael


Cockeram, Eric
Joseph, Rt Hon Sir Keith


Cope, John
Kaberry, Sir Donald


Corrie, John
Kellett-Bowman, Mrs Elaine


Costain, Sir Albert
Kershaw, Anthony


Cranborne, Viscount
Kilfedder, James A.


Crawshaw, Richard
King, Rt Hon Tom


Critchley, Julian
Knight, Mrs Jill


Crouch, David
Knox, David


Dean, Paul (North Somerset)
Lamont, Norman


Dorrell, Stephen
Lang, Ian


Douglas-Hamilton, Lord J.
Langford-Holt, Sir John


Dover, Denshore
Latham, Michael


du Cann, Rt Hon Edward
Lawrence, Ivan


Dunn, Robert (Dartford)
Lawson, Rt Hon Nigel


Durant, Tony
Lee, John


Eden, Rt Hon Sir John
Lennox-Boyd, Hon Mark


Fairbairn, Nicholas
Lester, Jim (Beeston)


Faith, Mrs Sheila
Lewis, Kenneth (Rutland)


Farr, John
Lloyd, Peter (Fareham)





Loveridge, John
Sainsbury, Hon Timothy


Luce, Richard
Scott, Nicholas


McCrindle, Robert
Shaw, Giles (Pudsey)


MacGregor, John
Shelton, William (Streatham)


MacKay, John (Argyll)
Shepherd, Colin (Hereford)


Macmillan, Rt Hon M.
Shepherd, Richard


McNair-Wilson, M. (N'bury)
Shersby, Michael


McNair-Wilson, P. (New F'st)
Silvester, Fred


McQuarrie, Albert
Sims, Roger


Madel, David
Smith, Dudley


Major, John
Speed, Keith


Marlow, Tony
Speller, Tony


Marshall, Michael (Arundel)
Spicer, Jim (West Dorset)


Mates, Michael
Spicer, Michael (S Worcs)


Maude, Rt Hon Sir Angus
Sproat, Iain


Mawby, Ray
Squire, Robin


Mawhinney, Dr Brian
Stanbrook, Ivor


Mayhew, Patrick
Stanley, John


Meyer, Sir Anthony
Steen, Anthony


Miller, Hal (B'grove)
Stevens, Martin


Mills, Iain (Meriden)
Stewart, Ian (Hitchin)


Mills, Peter (West Devon)
Stewart, A. (E Renfrewshire)


Miscampbell, Norman
Stokes, John


Moate, Roger
Stradling Thomas, J.


Monro, Hector
Taylor, Teddy (S'end E)


Montgomery, Fergus
Temple-Morris, Peter


Moore, John
Thatcher, Rt Hon Mrs M.


Morgan, Geraint
Thomas, Rt Hon Peter


Morris, M. (N'hampton S)
Thompson, Donald


Morrison, Hon C. (Devizes)
Thorne, Neil (Ilford South)


Mudd, David
Thornton, Malcolm


Murphy, Christopher
Townend, John (Bridlington)


Neale, Gerrard
Townsend, Cyril D, (B'heath)


Needham, Richard
Trippier, David


Nelson, Anthony
Trotter, Neville


Neubert, Michael
van Straubenzee, W. R.


Newton, Tony
Vaughan, Dr Gerard


Onslow, Cranley
Viggers, Peter


Oppenheim, Rt Hon Mrs S.
Waddington, David


Osborn, John
Wakeham,John


Page, Rt Hon Sir G. (Crosby)
Waldegrave, Hon William


Page, Richard (SW Herts)
Walker, B. (Perth)


Parris, Matthew
Walker-Smith, Rt Hon Sir D.


Patten, Christopher (Bath)
Waller, Gary


Pawsey, James
Ward, John


Penhaligon, David
Warren, Kenneth


Percival, Sir Ian
Watson, John


Pink, R. Bonner
Wells, John (Maidstone)


Pollock, Alexander
Wells, Bowen


Porter, Barry
Wheeler, John


Price, Sir David (Eastleigh)
Whitelaw, Rt Hon William


Proctor, K. Harvey
Whitney, Raymond


Pym, Rt Hon Francis
Wickenden, Keith


Raison, Timothy
Wiggin, Jerry


Rathbone, Tim
Wilkinson, John


Rees-Davies, W. R.
Williams, D.(Montgomery)


Rhodes James, Robert
Winterton, Nicholas


Rhys Williams, Sir Brandon
Wolfson, Mark


Ridley, Hon Nicholas
Young, Sir George (Acton)


Rifkind, Malcolm
Younger, Rt Hon George


Roberts, Wyn (Conway)



Ross, Stephen (Isle of Wight)
Tellers for the Noes:


Rossi, Hugh
Mr. Spencer Le Marchant and Mr. Carol Mather.


Rost, Peter

Question accordingly negatived.

Mr. Michael Marshall: Mr. Speaker, it may be convenient for the House to consider together amendment No. 73 and the remaining Government amendments. I assure the House that these are technical, drafting and clarificatory amendments. If any hon. Gentleman wishes me to explain any of them, I shall be willing and happy to do so.

Mr. Speaker: By leave of the House, I shall put together the Question on all the remaining Government amendments.

Clause 79

STAMP DUTY

Amendments made: No. 73, in page 67, line 5, after 'of', insert 'section 10 or'.

No. 74, in page 67, line 31, leave out 'by' and insert `under'.

No. 75, in page 67, line 37, leave out 'by' and insert 'under'.—[Mr. Michael Marshall.]

Clause 80

CAPITAL GAINS TAX, CORPORATION TAX AND DEVELOPMENT LAND TAX

Amendment made: No. 76, in page 69, line 5, at end insert—
'(7) For the purposes of section 21 of the Finance Act 1972 (value added tax: group registration) the Corporation, the Post Office and any bodies corporate resident in the United Kingdom or the Isle of Man which are subsidiaries of either of those bodies shall be eligible to be treated as members of a group until the expiration of the period of three years beginning with the appointed day; and where, by virtue of this subsection, two or more bodies are so treated, the Commissioners of Customs and Excise shall, as soon as practicable after the expiration of that period, by notice to those bodies terminate that treatment from such date as may be specified in the notice.'.—[Mr. Michael Marshall.]

Clause 82

GENERAL INTERPRETATION

Amendment made: No.123, in page 69, line 24, leave out 'any wholly owned subsidiary' and insert 'wholly owned subsidiaries'.—[Mr. Michael Marshall.]

Orders of the Day — Schedule 1

PROVISIONS WITH RESPECT TO THE CORPORATION AND THE MEMBERS THEREOF

Amendment made: No. 108, in page 74, line 14, leave out 'officers and such servants' and insert 'employees'.—[Mr. Michael Marshall.]

Orders of the Day — Schedule 2

PROVISIONS AS TO TRANSFERS OF PROPERTY, RIGHTS AND LIABILITIES

Amendments made: No. 77, in page 76, line 3, leave out from beginning to `shall' and insert—
'(2A) Sub-paragraph (2)'.

No. 78, in page 76, line 6, leave out 'this' and insert
`that'.

No. 109, in page 79, line 15, after 'of', insert
'or any person engaged in the business of'.

No. 110, in page 79, line 18, after 'of. insert
`or the person engaged in the business of'.

No. 111, in page 79, line 20, after 'of', insert
'or that person engaged in the business of'.

No. 79, in page 79, line 50, leave out 'transferred to and'.

No. 80, in page 80, line 5, leave out 'transferred to' and insert 'vested in'.—[Mr. Michael Marshall.]

Orders of the Day — Schedule 3

CONSEQUENTIAL AMENDMENTS

Amendments made: No. 81, in page 85, line 20, leave out '210(2)'.

No. 82, in page 85, line 22, leave out
`paragraphs 1 to 3 of Schedule 19, and Schedule 20'
and insert
`and paragraphs 1 to 3 of Schedule 19'.

No. 83, in page 85, line 25, leave out '199(2),'.

No. 84, in page 85, line 27, leave out
`paragraphs 1 to 3 of Schedule 17, and Schedule 18',
and insert
`and paragraphs 1 to 3 of Schedule 17'.

No. 85, in page 96, line 5, at end insert—
'(4A) Section 220(3) shall also have effect as if—
(a) for the words from "an order" to "local authority", in the first place where they occur, there were substituted the words "an order to which this subsection applies is made";
(b) after the words "section 215(1) of" there were inserted the words "or, as the case may be, paragraph 1 of Schedule 20 to";
(c) after the word "extinguished" there were inserted the words "or authorised to be stopped up or diverted";
(d) for the words "local authority", in all places (except the first) where they occur, there were substituted the word "authority"; and
(e) immediately before that subsection there were inserted the following subsection—
(2A) Subsection (3) of this section applies—
(a) to any order made by or on the application of a local authority under section 214(1) of this Act extinguishing a public right of way; and
(b) to any order made by a competent authority under section 210 of this Act authorising the stopping up or diversion of a footpath or bridleway;
and in this subsection "competent authority" has the same meaning as in the said section 210." '.

No. 86, in page 96, line 7, at end insert
`and for the words from "an order" to "the Secretary of State" there were substituted the words "an order to which subsection (3) of this section applies, the person by whom the order was made".'.

No. 87, in page 98, line 38, leave out from '1975' to end of line 39 and insert
'and Part III of Schedule 1 to the Northern Irelamd Assembly Disqualification Act 1975 (which specify certain offices all holders of which are disqualified under those Acts) shall each'.—[Mr. Michael Marshall.]

Orders of the Day — Schedule 4

GENERAL TRANSITIONAL PROVISIONS

Amendments made: No. 88, in page 106, line 15, leave out
'or engaged in the business of'.

No. 89, in page 106, line 17, at end insert—
'(bb) references in general terms (however worded) to persons engaged in the business of the Post Office were (or, if the context so requires, included) references to persons engaged in the business of the Corporation;'.

No. 112, in page 106, line 21, after 'by' insert
or engaged in the business of'.

No. 114, in page 106, line 24, after `by', insert
'or engaged in the business of'.—[Mr. Michael Marshall.]

Orders of the Day — Schedule 5

SPECIAL TRANSITIONAL PROVISIONS WITH RESPECT TO PATENTS FOR INVENTIONS AND REGISTERED DESIGNS

Amendment made: No. 90, in page 111, line 29, leave out
'vest in the Corporation by virtue of'
and insert


'are transferred to the Corporation by'.—[Mr. Michael Marshall.]

Orders of the Day — Schedule 6

ENACTMENTS REPEALED

Amendments made:

No. 92, in page 125, line 22, at end insert—


'2 &amp; 3 Eliz. 2 c. iv.
The Dover Harbour Consolidation Act 1954.
Section 120.'

No. 93, in page 125, line 41, column 3, at end insert—




`Section 17'.

No. 94, in page 126, line 12, column 3, leave out
`93(1)(ii) and (viii) and 94'
and insert
'93(1)(i), (ii) and (viii), 94 and 98'.

No. 95, in page 126, line 15, column 3, after '(3)', insert '(4)'.

No. 96, in page, line 16, column 3, leave out from '32' to `to' in line 17 and insert '36'.

No. 98, in page 127, line 36, column 3, leave out `Schedule 1' and insert 'Schedule 2'.—[Mr. Michael Marshall.]

Mr. Kenneth Baker: I beg to move, That the Bill be now read the Third time.
Everybody in the Chamber will know that this has been a very long sitting—nearly 23 hours. During that time we have had 23 debates and 15 Divisions, and have dealt with 125 amendments.
I thank my right hon. and hon. Friends for their support during those 23 hours. I particularly welcome the presence of my right hon. Friend the Prime Minister, who was voting with us at 6.30 this morning, whereas the Leader of the Opposition has been marked by his absence.
I thank my hon. Friend the Under-Secretary of State for the help that he has given me. When we were discussing how to approach the handling of Report and Third Reading, we said that when we put our hands to the plough we would go through to the end of the furrow. We have done that. There has been no U-turn.
It is right that I should recognise the services of the "Opposition Chief Whip", the hon. Member for Bethnal Green and Bow (Mr. Mikardo) and his "Deputy Chief

Whip", the hon. Member for Bolsover (Mr. Skinner). They marshalled their forces superbly. It is the shape of things to come.
I commend this important Bill to the House. I believe that it will be one of the most important measures of this Parliament. It will transform one of our great growth industries—telecommunicatons—from being dominated by a monopoly to being driven by competition. We intend to liberalise the monopoly. This will provide great opportunities for British companies. It will provide more jobs and growth.
This is an excellent Bill, and I commend it to the House.

Mr. Orme: This is an important but bad Bill—and it is no laughing matter. During the 23 hours of debate we have dealt with key issues such as the right to strike, pensions, the monopoly, cash limits, Cable and Wireless, telephone tapping, and mail interception. That is one reason why we have discussed the Bill for such a long time.
We make no apologies for having examined the Bill in great detail. I thank my hon. Friends for the way in which they have conducted the campaign throughout the night. We shall return to this issue again, because for us it is not closed. We have given a pledge that we shall restore the public monopoly, and we warn people that they could get their fingers burnt, because we shall not tolerate people making a profit out of this denationalisation measure.
On that basis, I ask my right hon. and hon. Friends to vote against the Third Reading.

Question put, That the Bill be now read the Third time:—

The House proceeded to a Division—

Mr. John Wells: (seated and covered): On a point of order, Mr. Speaker. I have always understood that hon. Members' votes should follow their voices. I understand that the hon. Member for Norfolk, North-West (Mr. Brocklebank-Fowler) voted for the Bill on Second Reading and against it on Third Reading. Which is his vote and which is his voice?

Mr. Speaker: The hon. Gentleman will be well aware that everyone in this place is entitled to change his mind.

The House having divided: Ayes 257, Noes, 156.

Division No. 146]
[2.36 pm


AYES


Adley, Robert
Garel-Jones, Tristan


Aitken, Jonathan
Glyn, Dr Alan


Alexander, Richard
Goodlad, Alastair


Alison, Michael
Gorst, John


Alton, David
Gow, Ian


Ancram, Michael
Gower, Sir Raymond


Arnold, Tom
Grant, Anthony (Harrow C)


Aspinwall, Jack
Gray, Hamish


Atkins, Robert (Preston N)
Greenway, Harry


Atkinson, David (B'm'th.E)
Griffiths, E.(B'y St. Edm'ds)


Baker, Kenneth (St.M'bone)
Griffiths, Peter Portsm'th N)


Baker, Nicholas (N Dorset)
Grist, Ian


Banks, Robert
Grylls, Michael


Beaumont-Dark, Anthony
Gummer, John Selwyn


Beith, A. J.
Hamilton, Michael (Salisbury)


Bell, Sir Ronald
Hampson, Dr Keith


Bendall, Vivian
Hannam, John


Benyon, Thomas (A'don)
Haselhurst, Alan


Benyon, W. (Buckingham)
Hastings, Stephen


Bevan, David Gilroy
Havers, Rt Hon Sir Michael


Biggs-Davison, John
Hawkins, Paul


Blackburn, John
Hawksley, Warren


Bonsor, Sir Nicholas
Heddle, John


Boscawen, Hon Robert
Henderson, Barry


Bottomley, Peter (W'wich W)
Heseltine, Rt Hon Michael


Bowden, Andrew
Hicks, Robert


Boyson, Dr Rhodes
Hill, James


Bright, Graham
Hogg, Hon Douglas (Gr'th'm)


Brinton, Tim
Hooson, Tom


Brittan, Leon
Howe, Rt Hon Sir Geoffrey


Brooke, Hon Peter
Howell, Ralph (N Norfolk)


Brotherton, Michael
Hunt, David (Wirral)


Brown, Michael (Brigg &amp; Sc'n)
Jenkin, Rt Hon Patrick


Browne, John (Winchester)
Jessel, Toby


Bruce-Gardyne, John
Jopling, Rt Hon Michael


Bryan, Sir Paul
Joseph, Rt Hon Sir Keith


Buck, Antony
Kaberry, Sir Donald


Budgen, Nick
Kellett-Bowman, Mrs Elaine


Bulmer, Esmond
Kershaw, Anthony


Burden, Sir Frederick
Kilfedder, James A.


Butcher, John
King, Rt Hon Tom


Cadbury, Jocelyn
Knight, Mrs Jill


Carlisle, John (Luton West)
Knox, David


Carlisle, Kenneth (Lincoln)
Lamont, Norman


Chapman, Sydney
Lang, Ian


Churchill, W. S.
Langford-Holt, Sir John


Clark, Dr David (S Shields)
Latham, Michael


Clark, Sir W. (Croydon S)
Lawrence, Ivan


Cockeram, Eric
Lawson, Rt Hon Nigel


Cope, John
Lee, John


Corrie, John
Lennox-Boyd, Hon Mark


Costain, Sir Albert
Lester, Jim (Beeston)


Critchley, Julian
Lewis, Kenneth (Rutland)


Crouch, David
Lloyd, Peter (Fareham)


Dean, Paul (North Somerset)
Loveridge, John


Dorrell, Stephen
Luce, Richard


Douglas-Hamilton, Lord J.
McCrindle, Robert


Dover, Denshore
McCusker, H.


du Cann, Rt Hon Edward
MacGregor, John


Dunn, Robert (Dartford)
MacKay, John (Argyll)


Durant, Tony
Macmillan, Rt Hon M.


Eden, Rt Hon Sir John
McNair-Wilson, M. (N'bury)


Eggar, Tim
McNair-Wilson, P. (New F'st)


Fairbairn, Nicholas
McQuarrie, Albert


Faith, Mrs Sheila
Madel, David


Farr, John
Major, John


Fenner, Mrs Peggy
Marlow, Tony


Finsberg, Geoffrey
Marshall, Michael (Arundel)


Fisher, Sir Nigel
Marten, Neil (Banbury)


Fletcher, A. (Ed'nb'gh N)
Mates, Michael


Fletcher-Cooke, Sir Charles
Maude, Rt Hon Sir Angus


Fookes, Miss Janet
Mawby, Ray


Fowler, Rt Hon Norman
Mawhinney, Dr Brian


Fox, Marcus
Mayhew, Patrick


Fraser, Peter (South Angus)
Meyer, Sir Anthony


Fry, Peter
Miller, Hal (B'grove)


Gardiner, George (Reigate)
Mills, Iain (Meriden)





Mills, Peter (West Devon)
Speed, Keith


Miscampbell, Norman
Speller, Tony


Moate, Roger
Spicer, Jim (West Dorset)


Monro, Hector
Spicer, Michael (S Worcs)


Montgomery, Fergus
Sproat, Iain


Moore, John
Squire, Robin


Morgan, Geraint
Stanbrook, Ivor


Morris, M. (N'hampton S)
Stanley, John


Morrison, Hon C. (Devizes)
Steen, Anthony


Mudd, David
Stevens, Martin


Murphy, Christopher
Stewart, Ian (Hitchin)


Neale, Gerrard
Stewart, A. (E Renfrewshire)


Needham, Richard
Stokes, John


Nelson, Anthony
Stradling Thomas, J.


Neubert, Michael
Taylor, Teddy (S'end E)


Newton, Tony
Temple-Morris, Peter


Onslow, Cranley
Thatcher, Rt Hon Mrs M.


Oppenheim, Rt Hon Mrs S.
Thomas, Rt Hon Peter


Osborn, John
Thompson, Donald


Page, Rt Hon Sir G. (Crosby)
Thorne, Neil (Ilford South)


Page, Richard (SW Herts)
Thornton, Malcolm


Parris, Matthew
Townend, John (Bridlington)


Patten, Christopher (Bath)
Townsend, Cyril D, (B'heath)


Pawsey, James
Trippier, David


Penhaligon, David
Trotter, Neville


Percival, Sir Ian
van Straubenzee, W. R.


Pink, R. Bonner
Vaughan, Dr Gerard


Pollock, Alexander
Viggers, Peter


Porter, Barry
Wakeham, John


Price, Sir David (Eastleigh)
Waldegrave, Hon William


Proctor, K. Harvey
Walker, B. (Perth)


Pym, Rt Hon Francis
Walker-Smith, Rt Hon Sir D.


Raison, Timothy
Waller, Gary


Rathbone, Tim
Ward, John


Rees-Davies, W. R.
Warren, Kenneth


Rhodes James, Robert
Watson, John


Rhys Williams, Sir Brandon
Wells, John (Maidstone)


Ridley, Hon Nicholas
Wells, Bowen


Rifkind, Malcolm
Wheeler, John


Roberts, Wyn (Conway)
Whitelaw, Rt Hon William


Ross, Stephen (Isle of Wight)
Whitney, Raymond


Ross, Wm. (Londonderry)
Wickenden, Keith


Rossi, Hugh
Wiggin, Jerry


Rost, Peter
Wilkinson, John


Sainsbury, Hon Timothy
Williams, D.(Montgomery)


Shaw, Giles (Pudsey)
Winterton, Nicholas


Shelton, William (Streatham)
Wolfson, Mark


Shepherd, Colin (Hereford)
Young, Sir George (Acton)


Shepherd, Richard
Younger, Rt Hon George


Shersby, Michael



Silvester, Fred
Tellers for the Ayes:


Sims, Roger
Mr. Spencer Le Marchant and Mr. Carol Mather.


Skeet, T. H. H.



Smith, Dudley





NOES


Adams, Allen
Cowans, Harry


Anderson, Donald
Cox, T. (W'dsw'th, Toot'g)


Archer, Rt Hon Peter
Crawshaw, Richard


Ashton, Joe
Crowther, J. S.


Benn, Rt Hon A. Wedgwood
Cryer, Bob


Bennett, Andrew (St'kp't N)
Cunliffe, Lawrence


Booth, Rt Hon Albert
Cunningham, G. (Islington S)


Boothroyd, Miss Betty
Dalyell, Tam


Bradley, Tom
Davidson, Arthur


Bray, Dr Jeremy
Dean, Joseph (Leeds West)


Brocklebank-Fowler, C.
Dempsey, James


Brown, Hugh D. (Provan)
Dewar, Donald


Brown, Ron (E'burgh, Leith)
Dixon, Donald


Brown, Ronald W. (H'ckn'y S)
Dormand, Jack


Callaghan, Rt Hon J.
Douglas, Dick


Callaghan, Jim (Midd't'n &amp; P)
Dubs, Alfred


Campbell, Ian
Duffy, A. E. P.


Campbell-Savours, Dale
Dunwoody, Hon Mrs G.


Carmichael, Neil
Eadie, Alex


Carter-Jones, Lewis
Eastham, Ken


Clark, Dr David (S Shields)
Edwards, R. (W'hampt'n S E)


Cocks, Rt Hon M. (B'stol S)
Ellis, R. (NE D'bysh're)


Coleman, Donald
Ellis, Tom (Wrexham)


Cook, Robin F.
English, Michael






Ennals, Rt Hon David
McTaggart, Robert


Evans, Ioan (Aberdare)
McWilliam, John


Evans, John (Newton)
Magee, Bryan


Fitt, Gerard
Marshall, Dr Edmund (Goole)


Flannery, Martin
Marshall, Jim (Leicester S)


Fletcher, Ted (Darlington)
Martin, M (G'gow S'burn)


Ford, Ben
Maxton, John


Forrester, John
Meacher, Michael


Foster, Derek
Mikardo, Ian


Foulkes, George
Millan, Rt Hon Bruce


Garrett, John (Norwich S)
Mitchell, Austin (Grimsby)


Garrett, W. E. (Wallsend)
Morton, George


George, Bruce
Moyle, Rt Hon Roland


Golding, John
O'Halloran, Michael


Hamilton, W. W. (C'tral Fife)
O'Neill, Martin


Hardy, Peter
Orme, Rt Hon Stanley


Harrison, Rt Hon Walter
Owen, Rt Hon Dr David


Hart, Rt Hon Dame Judith
Pavitt, Laurie


Haynes, Frank
Pendry, Tom


Heffer, Eric S.
Powell, Raymond (Ogmore)


Hogg, N. (E Dunb't'nshire)
Price, C. (Lewisham W)


Holland, S. (L'b'th, Vauxh'll)
Race, Reg


Homewood, William
Rees, Rt Hon M (Leeds S)


Horam, John
Roberts, Albert (Normanton)


Huckfield, Les
Roberts, Ernest (Hackney N)


Hudson Davies, Gwilym E.
Robertson, George


Hughes, Mark (Durham)
Robinson, G. (Coventry NW)


Janner, Hon Greville
Rooker, J. W.


John, Brynmor
Ross, Ernest (Dundee West)


Johnson, James (Hull West)
Sever, John


Jones, Barry (East Flint)
Sheldon, Rt Hon R.


Kaufman, Rt Hon Gerald
Short, Mrs Renée


Kerr, Russell
Silkin, Rt Hon J. (Deptford)


Kilroy-Silk, Robert
Silverman, Julius


Leighton, Ronald
Skinner, Dennis


Lewis, Ron (Carlisle)
Soley, Clive


Litherland, Robert
Spearing, Nigel


Lofthouse, Geoffrey
Stallard, A. W.


Lyons, Edward (Bradf'd W)
Stewart, Rt Hon D. (W Isles)


McCartney, Hugh
Stoddart, David


McDonald, Dr Oonagh
Stott, Roger


McElhone, Frank
Summerskill, Hon Dr Shirley


McGuire, Michael (Ince)
Thorne, Stan (Preston South)


McKelvey, William
Tilley, John


MacKenzie, Rt Hon Gregor
Urwin, Rt Hon Tom


Maclennan, Robert
Varley, Rt Hon Eric G.


McNally, Thomas
Wainwright, E. (Dearne V)


McNamara, Kevin
Walker, Rt Hon H. (D'caster)





Watkins, David
Winnick, David


Welsh, Michael
Woodall, Alec


White, Frank R.
Woolmer, Kenneth


White, J. (G'gow Pollok)
Young, David (Bolton E)


Wigley, Dafydd



Willey, Rt Hon Frederick
Tellers for the Noes:


Williams, Rt Hon A.fS'sea W)
Mr. James Hamilton and Mr. Allen McKay.


Wilson, Gordon (Dundee E)

Question accordingly agreed to.

Bill read the Third time and passed.

Mr. David Ennals: On a point of order, Mr. Speaker. Earlier today—it seems like yesterday—I raised with you the question of the behaviour of the hon. and learned Member for Beaconsfield (Sir R. Bell), because he pre-empted me by force when I attempted to table a new clause on the wearing of seat belts. You said, Mr. Speaker, that you would rule tomorrow—although it seems like today—on whether my report to you should be referred for consideration by the Committee of Privileges. I carefully read the statement made by the hon. and learned Gentleman. He said:
I should be sorry if the right hon. Gentleman felt a sense of grievance about anything that happened yesterday. I do not want any parliamentary colleague to feel a sense of personal grievance."—[Official Report, 1 April 1981; Vol. 2, c. 2,89.]
Although I felt a sense of personal grievance at the time, I accept the hon. and learned Gentleman's apology and ask you, Mr. Speaker, not to proceed further.

Mr. Speaker: I am very much obliged to the right hon. Gentleman.

Sir Ronald Bell: It remains only for me to thank the right hon. Gentleman for his remarks. I am sure that misunderstandings between hon. Members are best resolved amicably.

Mr. Speaker: Although it is officially 1 April, it is also Thursday. The House will want to know next week's business. I shall therefore call on the Leader of the House to make a Business Statement.

Business of the House

The Chancellor of the Duchy of Lancaster, Paymaster General and Leader of the House of Commons (Mr. Francis Pym): The business for next week will be as follows:
MONDAY 6 APRIL—Remaining stages of the Insurance Companies Bill.
Motion relating to financial assistance to International Computers Ltd.
Motion on EEC document 4460/80 on research and development in biomolecular engineering, and on the Department of Industry's supplementary memorandum of 8 December 1980.
TUESDAY 7 APRIL—Supply [15th Allotted Day]: Debate on an Opposition motion on youth unemployment.
Ways and Means resolution on the Transport Bill.
Motion on Members' salaries required for Members of the European Parliament.
Motion on Queen's University of Belfast (Northern Ireland) Order.
At 7 o'clock, the Chairman of Ways and Means is expected to name opposed private business for consideration.
WEDNESDAY 8 APRIL—Supply [16th Allotted Day]: Debate on developments in the European Community July-December 1980, Cmnd. 8195.
Consideration of Lords amendments to the Water Bill. Remaining stages of the Energy Conservation Bill [Lords]
THURSDAY 9 APRIL—Debate on a motion to take note of the White Paper on the Government's expenditure plans 1981–82 to 1983–84 Cmnd. 8175.
FRIDAY 10 APRIL—Private Members' motions.
MONDAY 13 APRIL—Second Reading of the Finance Bill.

Mr. Michael Foot: I thank the right hon. Gentleman for making that statement. I shall ask him one question about today's business, if that is not impertinent. I hope that he and those in charge of the affairs of the House will make proper provision for the major fire brigade union lobby taking place today. Many thousands of firemen are coming to the House. Despite the fact that today's business is abbreviated, I hope that the firemen will be able to come to the House and that facilities will be provided for them to meet the hon. Members who are here to receive them. I am sure that it would be the wish of the House generally that the lobby should be properly received.
Does the right hon. Gentleman intend to take the Easter Adjournment motion next week? It would possibly be better to have it the following week. Perhaps the right hon. Gentleman will say what provision he is making. I thank him for providing for the public expenditure debate that we have asked for on the last few occasions.

Mr. Pym: I am grateful to the right hon. Gentleman for his latter remark.
The authorities of the House are considering the question of the lobby, but there are established practices to be followed when the House is sitting. There may difficulties, but the House authorities are considering the matter.
It is my intention to take the Adjournment motion on Monday 6 April. There are quite recent precedents for

taking it at that distance from the Adjournment. The House is inclined to be more complaining of it when it is nearer the recess than when it is at longer range.

Mr. Foot: My recollection is that usually the Adjournment motion takes place a little nearer the time when the House is departing for the recess. In some respects that is more convenient for Back-Bench Members because on some occasions it is the last opportunity that they have for raising matters that might otherwise be raised earlier. I hope that it will not become normal practice for the motion to be taken 10 days before the House adjourns. I do not think that there have been many such precedents recently. We shall not press the matter now, but I hope that the right hon. Gentleman will not make regular use of this procedure in future.

Mr. Pym: I am not seeking to establish some new rule whereby almost invariably the Adjournment debate takes place at that range, but against the background of the business that I have announced 6 April will be the most convenient day on which to take the motion on this occasion.

Mr. A. J. Beith: As the Chairman of Ways and Means has not had the opportunity that he normally has at 2.30 pm on a Thursday to name the opposed private business, can the Leader of the House tell us whether it is likely to be the Greater Manchester Bill or some other Bill which will be taken next Tuesday?

Mr. Pym: I am sure that the Chairman of Ways and Means will take the earliest opportunity to make that information available.

Mr. John Farr: Can my right hon. Friend give the House any idea when we shall be considering the Second Reading of the Wildlife and Countryside Bill?

Mr. Pym: Not at the moment, but it will not be next week.

Several Hon. Members: rose—

Mr. Speaker: Order. I shall call all those hon. Members who have been rising.

Mr. Dick Douglas: Will the Secretary of State for Defence make a statement to the House next week about Rosyth dockyard as two events this week have caused much concern over an area greater than the immediate proximity of the dockyard? Is the right hon. Gentleman aware that the important part of the isotope is still missing and that three deaths have occurred in the yard? Although a board of inquiry has been set up, does the Secretary of State agree that the issues involved require greater ventilation?

Mr. Pym: I shall convey the hon. Gentleman's remarks to my right hon. Friend and consult him on the question whether a further statement can or should be made. The issue is of great public concern, particularly in the hon. Gentleman's constituency.

Mr. Michael English: Is the right hon. Gentleman aware that the first report of the House of Commons Commission—which you chair, Mr. Speaker—has not been debated, nor has the second, and that, although the first relates only to a three-month period, the second relates to a full year? As another year is now ending and a third report is being prepared which may not be


debated, can the right hon. Gentleman assure us that we shall have a debate on the first two before the third is completed, as we cannot have great confidence in the administration of the House if such matters cannot be discussed on the Floor of the House?

Mr. Pym: I appreciate the hon. Gentleman's interest. He has made requests direct to me. There is a problem about finding time, and only comparatively few hon. Members want time spent in the Chamber on the matter, but that is not to say that the subject is not worthy and appropriate for debate. However, I have to fit it into the programme, and I cannot see that we shall have time, at any rate in the near future.

Mr. Nigel Spearing: When will the Minister of Agriculture, Fisheries and Food make a statement on the CAP price discussions?

Mr. Pym: I understand that it will be tomorrow.

Mr. Bob Cryer: Will the Leader of the House arrange for an early debate, or at least a statement to be made, to answer the criticisms of the provision of fire cover, as the lobby today of some 5,000 firemen is an expression of the concern that local authority cuts imposed by the Government are throwing thousands on the dole and, in particular, reducing fire cover? Is the right hon. Gentleman aware that the lobby comprises experienced fire-fighters, who are greatly concerned?

Mr. Pym: I do not believe that I can find time for the debate. I appreciate the problems of the lobby arranged for this afternoon, but it is not unfair to comment that, had the hon. Gentleman exercised a little more self-restraint, the lobby could have taken place in normal circumstances.

Mr. Joan Evans: Will the Leader of the House consider having the statement on Common Market prices made on Monday so that more hon. Members can be present to discuss the substantial increases in the prices of meat, milk, beef and bread, which will cost the nation £450 million?

Mr. Pym: It is the normal courtesy and practice of the House for the Minister to make a statement on such matters as soon as possible, but, again, as we have not been able to do so this afternoon, tomorrow will be the correct time.

Mr. Dennis Skinner: When we have another mammoth Bill like the British Telecommunications Bill, will the Leader of the House ensure that more time is given for Report and Third Reading so that he avoids falling into the deep well that he has fallen into on this occasion, thus losing a day's business, as happened last July? Will he speed up the exercise of the borrowing powers under the Coal Industry Act so that we have sufficient money to cope with pit closures, to steady down coal imports to the rate suggested in the talks and to ensure that, as with underground workers and certain other coal industry workers, surface workers can retire at 60 years of age?

Mr. Pym: I think that the Coal Industry Act borrowing powers are on time. I do not think that the Government or my right hon. and hon. Friends can be described as being in the depths of a well. It might, however, be said that some other hon. Members a:re in that position. The Report stage and Third Reading of the British Telecommunications Bill took 22 or 23 hours. That seems to me a reasonable amount of time for those stages of a Bill.

Calderdale (Assisted Area Status)

Motion made, and Question proposed, That this House do now adjourn.—[Lord James Douglas-Hamilton.]

3 pm

Dr. Shirley Summerskill: I am glad to see such keen interest among hon. Members in the problems of my constituency. I have waited a long time for this debate as, I know, has the Minister. It is important that the problems of my constituency should be brought to his attention even at this rather strange hour of the parliamentary day. I must say, however, that I prefer a daytime Adjournment debate to a middle-of-the-night debate. The Chamber is comparatively crowded for such a debate.
I am asking for the continuance of assisted area status for Calderdale because it is of vital importance to the future of Halifax's industry and to my constituents. The case that I make has strong support from Calderdale council, the West Yorkshire county council, the chamber of commerce in Calderdale, the Calderdale trades council and the Committee for the Economic Regeneration of Calderdale.

Mr. Russell Kerr: And the Feltham Labour Club.

Dr. Summerskill: I thank my hon. Friend.
One of the first actions of this Government was to deschedule Calderdale's assisted area status, to begin next year. Calderdale had received assistance since 1974. Every Conservative Member voted in favour of the descheduling on 24 July 1979. The practical effects on Calderdale will be the total withdrawal of access to a huge range of funds. The Minister will be aware of these. I shall however, remind him of some of them.
There were the funds available from the European Regional Development Fund, the European Social Fund, other European Community funds, regional development grants, selective financial assistance, and office and service industry grants. The decision also means termination of the advance factory programme and many others. The lower priority rating given to the area will affect many expenditure programmes.
I know that the Government are to review changes of status in some areas later this year. Calderdale is not so far included in the group that it is planned to review. It is to go from an intermediate area direct to a non-assisted area. It will not even qualify for review. With this in mind, I would like the Minister to hear evidence that should impress upon him Calderdale's need for a review of the decision concerning its assisted area status. This evidence shows the serious and rapid deterioration in Calderdale's unemployment and the erosion of its industrial base. This has all taken place since the July 1979 decision. In other words, the arguments for assistance were strong then. I voted against the withdrawal of assistance. The arguments are even stronger now.
The circumstances have drastically changed. I understand that it is a criterion for review by the Minister when circumstances have changed. In the last year alone the unemployment rate in Calderdale has risen by 145 per cent. This is a steeper increase in the last year than in any other part of Yorkshire. It is certainly steeper than the increase in Bradford, which was 63 per cent. Yet Bradford will retain its intermediate status. I shall comment further

on the apparent discrepancies in the treatment between one area and another. That figure shows a yawning discrepancy.
In May 1979, when the Conservative Government were elected, Calderdale had, as adult unemployed people, 3·6 per cent. of the population, that is, 2,919 people. In March this year the 3·6 per cent. of the population had risen to 10·2 per cent. of the population unemployed. Instead of 2,919, there are now 8,118 adult unemployed, and there are 47 people chasing every vacancy.
To those figures we must add disguised unemployment. Thousands of women do not register because they are not entitled to unemployment benefit, or because they think that there is no point in trying to find a job. To those figures we must add 5,578 people on our temporary short-time working scheme. That number has gradually increased since September 1979, when it was only 324. In my view, those people are potentially unemployed. If the scheme were taken away they would be unemployed overnight.
We must add to those figures the young people. I did not include young people in the figures that I gave; I gave only the figures for the adult unemployed. There are now about 450 young people to add to that total. The present trend in the country and in Calderdale indicates that unemployment will continue to rise.
I am sure that the hon. Gentleman knows that Calderdale was one of the birthplaces of the Industrial Revolution. Its prosperity since then has depended on a wide range of manufacturing industries, but especially upon wool, textiles, carpets, engineering, and Mackintosh's—the toffee company—which is the largest single private employer in Halifax. Since the 1930s it has never known unemployment of the kind that it faces today, because of this diversity of industry, which has been its strength, But its whole manufacturing base has been gradually eroded. Short-time working, redundancies and closures are hitting every type of firm in the town, over a wide range, and they make almost daily headlines in the Halifax Evening Courier.
The area is becoming deindustrialised week by week and month by month. The process goes on. I fear that the jobs being lost now cannot be recreated. The firms being shut cannot be reopened. They are all irreplaceable. Firms with national and international reputations, and firms that have won the Queen's Award for Exports, are facing serious problems.
Perhaps the most serious problem is the rapid decline in the textile industry since July 1979. I know that it was declining before then, but all the people who work in the industry are agreed that the decline since this Government came to power has been far more serious and far more steep. It is a traditional basic industry in Calderdale. Also in Halifax we have the world-famous Crossley Carpets—now Carpets International. It, too, faces serious problems. Between April 1979 and April 1980, 40,000 textile workers lost their jobs in this country, and West Yorkshire was losing more of those jobs than any other area.
If it were a question only of textiles, it would be a serious problem for the town; but it is not. It can no longer rely on its broad manufacturing base. Machine tools and engineering are being seriously hit. The latest tragedy in Halifax—the announcement was made only at the end of


last week—is that Asquiths, a world-famous engineering firm going back many years as an old-established family firm, is due to close.
That is another example of the gradual erosion of the machine tool industry. It is the second of Halifax's major engineering factories to close in less than a year. The town has a record of an industrious and efficient work force, producing high-quality goods.
I should like the Minister to go into more detail about the way in which areas are chosen for assistance. What are the criteria? There appear to be discrepancies and anomalies. An area can be reviewed only if it has gone down two stages. That seems to be a strange rule. An area that has gone down only one stage might have changed drastically in terms of unemployment and other factors, and yet it will not be eligible for review.
Calderdale has changed drastically since July 1979. There is a structural weakness in its economy. That is the phrase for which the Department looks when it decides whether to review. The traditional manufacturing base is at risk. That is one criterion for a review. The other criterion is that unemployment has changed drastically since the original classification.
The Minister will say that unemployment in some areas without assisted area status is higher than it is in Calderdale. I can tell him of areas with unemployment rates lower than Calderdale's 10·2 per cent. that are to retain intermediate assisted area status after next year. Richmond, in North Yorkshire, has an unemployment rate of only 8·2 per cent. and yet that is an intermediate area. Barnstaple, in the South-West, has an unemployment rate of 7·9 per cent. and Bideford has a rate of 9·5 per cent., yet they are to remain intermediate areas.
Other places with unemployment rates lower than 10·2 per cent. have development area status. Unemployment figures alone are obviously not sufficient classification. Changing circumstances should be the criterion. The anomalies should be explained or abolished when the Government review the areas. Since July 1979 Calderdale has experienced a rapid increase of 145 per cent. in unemployment. It has experienced a decline in its manufacturing base, and that is getting worse.
Several remedies are suggested by employers, trade unionists, economists, employers and the Opposition. Examples are lower interest rates, an end to monetarist policies, value added tax off confectionery, which would help Mackintosh's, and selective import controls to help textiles and carpets.
Today I ask for a particular type of help. I ask for a review of the decision to withdraw assisted area status for Calderdale and for that review to result in the retention of assistance. That makes better financial sense than allowing the present position to deteriorate further, so that the area cannot go back to the prosperous base that once existed. Then it might be too late to tackle the problem.
We want to help to preserve jobs and to create new jobs, whether they are in the traditional, new or service industries. We want help to improve the environment, to further economic generation and to provide a basis for future expansion, if that is possible.
Halifax and Calderdale have a reputation for efficient hard work and good industrial relations. That has not changed since July 1979, but all the other criteria have changed.
I hope that I have convinced the Minister that things have changed very much for the worse. We must have a review of the decision about status, and assistance must be retained.

The Under-Secretary of State for Industry (Mr. John MacGregor): I am not sure whether I should congratulate or commiserate with the hon. Member for Halifax (Dr. Summerskill) on the day on which she obtained her Adjournment debate, because I know that she has been on tenterhooks throughout most of the night wondering when it was to take place. However, I do congratulate her, especially after the long hours that we have had without sleep, on the coherent way in which she has just put forward her case for a change in the Government's decision on the withdrawal of assisted area status from Calderdale in August 1982.
Towards the end of her speech the hon. Lady ranged fairly widely over much wider economic issues than the question of regional development status, and if I have time towards the end of the debate I shall endeavour to touch on that, but as she concentrated on the question of assisted area status I should like to devote the bulk of my speech to that.
As we have made clear on a number of occasions, we are always ready—and the hon. Lady mentioned that we are committed to a review of assisted area status for certain localities later this year—to discuss the situation of particular areas. I am therefore grateful to her for having given me an opportunity to explain again to the House the Government's approach to regional policy and the application of that policy to Calderdale in particular.
The hon. Lady will not expect me to give any decision now. As she knows, my right hon. Friend the Secretary of State is considering representations about the assisted area status of West Yorkshire that were made to him in February by a deputation from the metropolitan county council. He is also considering a submission which he has recently received from the borough of Calderdale. It would not be right to anticipate the outcome of these considerations, nor would I wish to do so, but I shall bring to my right hon. Friend's attention the points that the hon. Lady has made in this debate.
The hon. Lady asked me to restate the general criteria on which our regional development policy is based, and it might be helpful if I give an indication of the criteria and then deal with some of the points specifically relating to Calderdale that will have to be taken into account in the consideration that my right hon. Friend will give to the views of the deputations that he has received.
As the hon. Lady knows, successive Governments have conducted a regional policy designed to help to regenerate industry in those areas where traditional industries are in decline and which suffer from problems of persistently high unemployment, and especially of unemployment persistently high relative to other areas.
On coming into office we found that no less than 44 per cent. of the employed population were covered by assisted areas. Such a large coverage inevitably weakened the effectiveness of a regional policy designed to alleviate the problems of the worst-hit areas, since it covered such a large area of the country, including many parts that could not be defined as significantly worse than the average.
That is illustrated by comparing an average unemployment rate of 5·5 per cent. in all intermediate


areas in 1979 with a Great Britain rate of 5·6 per cent. In addition, we found that the cost of regional aid was planned to rise to over £600 million in 1982–83. The country—that is, the taxpayers—simply could not afford that scale of public expenditure on a policy whose effects were demonstrably not achieving its objectives. There were also problems—I have had this matter drawn to my attention by a number of my hon. Friends of creating unfair competition in certain industries in particular areas that received no regional aid at all. It was against that background that we reviewed our regional policy.
I shall not repeat the statement made by my right hon. Friend the Secretary of State on 17 July 1979, but, as the hon. Lady will know, the objective—indeed, the outcome, of that policy—was to reduce the coverage from about 44 per cent. of the country to 26 per cent., first concentrating on the areas that most needed the help.
The package of measures announced in July 1979, to which the hon. Lady referred, reflects our aim of continuing with a strong but more selective regional industrial policy. As well as making the policy more selective and hence more effective in helping those areas with the severest long-term problems, we seek to reduce the burden on public expenditure by a planned £233 million by 1982–83. That in itself is helping industries, not only in the area to which the hon. Lady refers but throughout the country, as it gradually helps us in our strategy of getting interest rates down, interest rates being one of the main burdens on industry at present. Nevertheless, expenditure on regional incentives will continue to be substantial.
As my right hon. Friend said in making his announcement, regional differences will not be reduced simply and solely by redistributing money from one group of taxpayers to another. Local enterprise and co-operation in making business competitive and profitable must also play a large part. I pay tribute to the type of work force in the hon. Lady's area, to which she referred.
I refer next to the criteria that we use, and must use, in considering assisted area status, on which the hon. Lady asked me to concentrate on today. First, there is the relative level of unemployment. The hon. Lady said that there had been substantial change in the Calderdale area in the levels of unemployment over the past 12 months. She drew attention to the particular rate of increase. I do not wish to minimise that fact.
The Government are deeply concerned about unemployment throughout the country, and not only in Calderdale. They are particularly interested in areas where the world recession has aggravated long-standing problems within British industry and produced rapid increases in unemployment. The hon. lady referred to the restructuring of industry in her area, which is an inevitable process if we are to create a healthy modern economy for the late twentieth century.
I was pleased to note the submission that was made recently by the chief town planning officer to the Department about the situation in Calderdale. He said:
The roots of current problems lie in factors which affect a much wider area than Calderdale. The recession is international.
That is one of the problems with which we have to deal.
It is not the absolute level of unemployment or the absolute level of unemployment increases that must count,

because those are factors that have affected all areas. We must consider the relative levels of unemployment when considering assisted area status. That point has been made clear to the borough, and I believe that the reference to relative levels appeared in the chief town planning officer's letter to us.
Under the Industry Act 1972 it is not only the unemployment figures which are noteworthy and which must count in considering assisted area status. All the circumstances in a given area, both actual and expected—including some expected ones to which the hon. Lady referred—must be considered, including the state of employment, unemployment, population changes, migration, the objectives of regional policies, location and other possible advantages and disadvantages of the area in attracting jobs.
I recently took part in an Adjournment debate on Corby, which at present has development area status. I was able to point out that, notwithstanding the unemployment there, because Corby has development area status and because of other factors it is now attracting many more new jobs. That is happening because the other factors are beneficial to employment.
The third factor is the need for stability and continuity. This is particularly important. I stress the significance of stability in our regional industrial policy. The main purpose of regional policy is to provide incentives to invest. It is important that industry should have confidence in the longer-term availability of those incentives for assisted areas so that it can take them into account when deciding where to locate new investment. Regional policy is a long-term instrument designed to produce long-term solutions to long-term problems. For the incentives to have a real effect on investment intentions, they must be stable and predictable.
That is a particular problem at present. I find that many hon. Members do not take quite on board the fact that to engage in fine tuning on a regular basis works against that objective. Thus only when a major fault occurs in the fortunes of any areas should we consider a change in assisted area grading itself.
I note that the hon. Member for Whitehaven (Dr. Cunningham), when speaking from the Opposition Front Bench at Question Time, asked:
Does the hon. Gentleman agree that whether a regional policy is effective depends largely on companies believing that it will be stable and that it will not continually be altered".—[Official Report, 9 March 1981; Vol. 1000, c. 606.]
That is an importance factor that we must take into account. As the hon. Lady pointed out, it sometimes means that some areas that a year and three-quarters ago received intermediate area status will have unemployment levels lower than hers are now. That is an inevitable consequence of not constantly fine-tuning the policy. A few months' or even one year's unemployment figures cannot be used on their own to construct a case for a change of status.
The fourth point is the effect on other areas. The major question is whether, if Calderdale were granted continued assisted area status, it would not lead also to a strong demand from other areas for a regrading of their status. I think that that is very likely, because I have already received several deputations along those lines. The levels of employment in several of these areas have changed


since all the assisted areas were last established. Many would therefore argue that if Calderdale were changed they should also be changed.
For example, Calderdale had an unemployment rate of 10·2 per cent. in March, which is noticeably below the average for intermediate areas, let alone the higher-graded areas. There is a whole variety of situations here and there is a real danger that if a change were made in one it could lead to such a demand from other areas that the area that was first changed, let us say Calderdale, might find its position not strengthened but weakened.
That brings me to Calderdale. My hon. Friend the Member for Sowerby (Mr. Thompson) keeps me regularly in touch with the position there. The points that I have made about regional policy being long-term in nature and the need to maintain a stable regional "map" are relevant to Calderdale. The hon. Lady pointed out the steep increase in unemployment, but even with the rapid increase over the last year the provisional March figure for Halifax is 10·2 per cent., while that for Todmorden is 10·4 per cent.—compared with a Great Britain rate of 10·1 per cent. I have a travel-to-work area in my constituency that has never received assisted area status, where the level is 10·9 per cent. The hon. Lady referred to Bradford. The unemployment level there is 10·2 per cent.
The important point is that the average unemployment rate of all those areas that are due to remain intermediate areas after August 1982 was 12·3 per cent. in February—the March figures are not yet available. The statistics show that one view could be that the decision to withdraw assisted area status from Calderdale is still justified on relative levels.
Other factors also have to be taken into account. I accept that there is a need to increase diversification in Calderdale, which is still too dependent upon declining textile industries. I hope very much that small firms will have a big part to play in this. As the hon. Lady knows, I have particular responsibility for the encouragement of small firms, and we have already taken many measures to help them. In parts of the area there are problems of dereliction, difficult terrain and obsolete stone-built multistorey mills that are ill-suited for modern industrial use and are difficult and expensive to remove. Derelict land
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clearance area status will continue to apply to the area when it loses its assisted area status in 1982. In the longer term Calderdale has many advantages for new developments, including good communications, in particular, access to the M1and M62 motorways, and a varied, skilled work force.
At the heart of the hon. Lady's argument was the plight of the textile industry. I have not the time to elaborate on that now, except to make it clear that we have taken a number of measures to assist the textile industry and that we are committed to a rigorous approach to the multi-fibre arrangement renegotiations.
The hon. Lady said that only the intermediate areas with two changes in status would be firmly reviewed later this year, but we have consistently said that in respect of any area we are prepared to consider evidence of long-term change that debilitates that area's industrial base. Her feelings for her constituents are entirely understandable. They are ones that we all share, and it is legitimate for her to put forward the strongest case that she can, but, without anticipating my right hon. Friend's decision on the representations that he has received, it is important to bear in mind—

Dr. Summerskill: How long is long-term?

Mr. McGregor: Long-term, when looking at structural changes in an area, must be more than one year's relative change.
After 1 August 1982 C'alderdale will continue to be eligible for 100 per cent. grants for approved land reclamation schemes. It has the benefit of a good geographical location with good communications and, perhaps most important of all, it has a heritage of highly-skilled people who, I am sure, are far-sighted and resilient enough to take advantage of the opportunities that will be presented, once current pressures ease, for industrial and commercial enterprise. In the light of all—

The Question having been proposed after Ten o'clock on Wednesday evening, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at half-past Three o'clock.